Boeing (NYSE: BA) lost its bid for the new Air Force tanker to Northrop Grumman (NYSE: NOC). The aircraft builder was able to get the process re-opened and now has a shot at getting the business that was awarded to Northrop.
Winning another chance at the big contract is not enough. According to The Wall Street Journal, "Boeing Co. said it is inclined to bail out of its effort to win a $40 billion contract to build aerial refueling tankers for the U.S. Air Force unless the Pentagon agrees to give it a total of six months to submit a new bid."
Boeing claims that it will take a long time to figure out how to configure one of its airplanes to haul the amount of jet fuel required by the Air Force.
The request is bogus. Boeing has been through the bidding process for the tanker once before. The idea that the company did not understand the specifications is remarkable.
Boeing may be trying to gain time to shave some of its costs off the project so that it can bring the price of its bid down. It should have done that in the first round. There is no reason it should get that additional time.
It is no wonder Northrop got the original approval, and it is likely to get it again in this round.
Douglas A. McIntyre is an editor at 247wallst.com.
Entrepreneur's Journal: Putting together a solid sales contract
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Reader Comments (Page 1 of 1)
8-22-2008 @ 11:50AM
JC said...
Mr. McIntyre should keep his opinions focused on what he knows, which clearly is not anyting to do with how to build an airplane to meet a specific mission. Boeing didn't get the same data as EADS / Northrup did in the first go round, hence the protest and current mess. It's also clear he has never read, or if he did, could not comprehend the IG report from the GAO on the first round of bidding. The Airbus could not meet the operational requirements required, eve when they got favorable treatment from the Air Force over Boeing.
Get your facts straight before you pontificate.
8-22-2008 @ 12:43PM
Len Lofthus said...
Do you really think it makes any sense for our nation to give a contract of this size to Airbus???
8-26-2008 @ 9:43PM
Jim Roberts said...
The Air Force will never forgo the reliability and redundancy of a four engine airplane for a three engine one.
Also, the four engine Airbus will fly further with more fuel, troops and cargo than the three engine Boeing 777. It's no contest.
Finally, the four engine Airbus airplane has more than 50% US content. Plus, it will be assembled in Alabama.
Boeing should save its bid & proposal money by dropping out of this particular contest and use it to pursue another.