Pentagon chief: No decision yet on new tanker bids

WASHINGTON, June 26 (Reuters) - U.S. Defense Secretary Robert Gates said on Thursday he has not yet decided whether to reopen the competition for a $35 billion Air Force refueling tanker program.

Last week, federal auditors faulted the Air Force's selection process which resulted in Northrop Grumman Corp (NOC.N: Quote, Profile, Research, Stock Buzz) and its European subcontractor, EADS (EAD.PA: Quote, Profile, Research, Stock Buzz), winning the lucrative deal over rival Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz).

The Government Accountability Office said the Air Force made "significant errors" and urged the Air Force to rerun the bidding competition.

"I haven't made any decisions yet, but I would say that I take the GAO report very seriously," Gates told reporters. "They clearly pointed out some areas where we were deficient."

At stake is a deal for 179 aircraft over 15 years valued at $35 billion, the first of three projected acquisition phases for what the Air Force calls its No. 1 purchase priority. (Reporting by Jim Wolf and Julie Vorman; Editing by Tim Dobbyn)