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Boeing Says Air Force Review Shows its Tanker Bid Cheaper

Bid was less than rival Northrop Grumman's who is part of consortium with Airbus

Boeing said on June 12 that a U.S. Air Force review has concluded that its bid for a massive aerial refueling tanker contract is lower than that of rival Northrop Grumman, after adjusting for several errors. "We've said all along for the past almost 100 days that we thought we had the better valued tanker over the long, long life cycle of the system," Bill Barksdale, spokesman for Boeing's Tanker program, said.

Five errors were discovered in the way the air force calculated a 25-year estimated cost for the aircraft, Northrop Grumman said. "During the protest review, the Air Force discovered five errors in the (cost) computation, which in turn caused a slight adjustment in the operating costs of the two aircraft," Northrop Grumman said. The company added that "for all intents and purposes," the cost estimates of both aircraft remain the same and "the minor errors should have no impact on that ruling."

Boeing's Barksdale said it was significant to know that errors were acknowledged, confirming the aerospace giant's surprise to have its bid rejected. "Finding out that the air force is conceding that they made some mistakes, I mean that's definitely powerful for us in that it backs up what we thought the day that we were not selected that we were surprised and we didn't understand. "

The $35 billion tanker contract was awarded in February to Northrop Grumman and its European partner, the European Aeronautic Defence and Space Company (EADS), parent of Boeing's archrival Airbus.

The Government Accountability Office (GAO), the investigative arm of the U.S. Congress, is reviewing the contract. A decision is expected by June 19.

Copyright Agence France-Presse, 2008

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