TIMELINE: U.S. Air Force tanker saga rumbles on

(Reuters) - U.S. government auditors ruled on Wednesday that the Air Force made "significant errors" in running the competition for $35 billion worth of new aerial refueling tanker aircraft, the latest twist in a nearly eight-year long procurement saga with strong political overtones.

The Government Accountability Office recommended that the Air Force reopen the competition, a boost for losing bidder Boeing Co, which had protested the award and lobbied for it to be overturned.

It is a blow for Northrop Grumman Corp and its European partner EADS, which were awarded the contract in February.

The following is a chronology of events in the Air Force's effort to replace its aging fleet of KC-135 refueling tankers, which is no nearer to completion than it was in 2001:

- September 25, 2001 - Darleen Druyun, then the Air Force's No. 2 acquisition official, meets with Boeing officials to lay out a strategy to lease 100 Boeing 767s.

- January 2002 - Congress OKs lease plan.

- February 2002 - Air Force requests information from Boeing and Airbus parent EADS about tanker capabilities.

- May 2002 - Sen. John McCain, now the presumptive Republican presidential nominee, slams the proposed tanker lease deal as a taxpayer "rip-off."

- October 17, 2002 - Druyun meets then Boeing Chief Financial Officer Michael Sears to discuss a job offer. Sears tells her: "This meeting really didn't take place."

- November 2002 - Druyun recuses herself from further negotiations with Boeing, retires mid-month, then accepts a $250,000-a-year job with Boeing.

- January 3, 2003 - Boeing announces Druyun hire. Watchdog group Project on Government Oversight describes it as "one of the most egregious examples in recent memory of the revolving door between the federal government and defense contractors."

- May 23, 2003 - Then-Pentagon chief arms buyer Edward Aldridge approves $23.5 billion Air Force plan to lease, then buy, Boeing 767 tankers, four days before he retires.

- November 24, 2003 - Boeing fires Druyun and Sears for unethical conduct in Druyun's hiring. Boeing Chief Executive Phil Condit resigns a week later.

- March 29, 2004 - Pentagon inspector general says the Air Force used an inappropriate procurement strategy in the tanker deal and recommends a halt until the Pentagon resolves several issues.

- April 21, 2004 - Druyun pleads guilty to a conflict of interest violation for discussing job with Boeing while still overseeing billions of dollars of its business with the Air Force. She is later sentenced to nine months in prison.

- October 28, 2004 - Congress passes defense spending bill for fiscal 2005 that terminates Air Force's authority to lease tanker aircraft.