Pentagon watchdog mulls request for tanker probe

WASHINGTON (Reuters) - The Pentagon's internal watchdog agency said it will respond "as soon as possible" to a request by seven U.S. senators that it investigate whether a data mix-up could mar a heated refueling plane competition.

"We are currently examining the information provided. We will provide you the results of that examination and our course of action in the matter as soon as possible," the office of the Pentagon inspector general (IG) said in a January 28 letter.

It was not immediately clear whether the IG's examination could delay an Air Force contract award, which industry executives now expect in late February or early March.

A copy of the letter from Assistant Inspector General John Crane was released by the office of Senator Maria Cantwell, a Democrat from Washington state who called for an investigation in late January along with six other senators who are backing Boeing Co's tanker bid based on its 767 plane.

Boeing is locked in a bitter competition with Europe's EADS, whose offer is based on the Airbus A330 plane, to build 179 new aerial tankers for the U.S. Air Force.

The contract could be worth up to $50 billion, including maintenance and support in later years.

Gary Comerford, a spokesman for the Pentagon inspector general's office, said he could not predict how soon the office would decide whether or not to launch an investigation.

The Air Force had no further comment on the prospect of an inspector general investigation. A spokesman said the service still expects to announce a contract award in early 2011 after the companies turn in their final bids on February 11.

But one congressional aide said the "quick look" being taken by the inspector general could well delay a contract announcement. "You can't just slough off an IG investigation," said the aide, who was not authorized to speak on the record.

Top Air Force officials insist the data mix-up last November was unintentional and involved no pricing data that could have comprised the procurement.

Air Force General Duncan McNabb, who heads the Pentagon's Transportation Command, on Monday reiterated that the tanker competition remained his command's top priority.

He said the current fleet of KC-135 planes were superbly maintained, but they were already 50 years old on average and some would remain in service for another 30 years.

McNabb said buying new airplanes to replace the current fleet would help cut the military's fuel bills sharply since the new planes will be able to be refueled themselves, allowing them to stay in the air and avoid long flights to get fuel.

He told the Center for Strategic and International Studies that a new tanker and better operational plans could save 20 to 25 percent of current fuel use. "When we're talking about five million pounds of fuel a day, 25 percent is not bad," he said.

(Reporting by Andrea Shalal-Esa; Editing by Phil Berlowitz)