Just when all seemed blue skies for the Boeing Co. (NYSE:BA), the General Accountability Office has thrown a monkey wrench into Boeing's deal, potentially worth $15 billion, with the Air Force to supply it with 141 new search and rescue helicopters. The GAO has recommended the bidding be reopened due to inconsistencies in following established bidding rules.Hearts must be soaring at Lockheed Martin Corp. (NYSE:LMT) and United Technologies Corp. (NYSE:UTX) which lodged the protest with the GAO after losing the bid despite offering what -- they claim -- to be superior products.
The Air Force choice last November of Boeing for 2019 delivery of the new fleet took some by surprise. Lockheed was thought the front runner, with a version of the President's US-101 chopper, Marine One. United Tech's Sikorsky had hoped to replace its Pave Hawk helicopters, currently used for this purpose, with its new generation S-92.
However, the Air Force chose Boeing's updated version of the CH-47 Chinook, which is to be built in Maryland. Lockheed's candidate would have had considerable non-U.S.-manufacturing.
According to the Wall Street Journal [subscription required], only about a quarter of all such protests lead to a decision change, so Boeing owners shouldn't panic yet. The company still has a good chance of pulling this deal out of its spin.
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Reader Comments (Page 1 of 1)
3-01-2007 @ 12:25PM
R. Brubaker said...
Believe HH-47 is to be built in PENNSYLVANIA,
(Ridley Park--Phila. suburb, to be specific) where all previous H-47's have been built, not as reported, in MARYLAND.