UPDATE 3-Northrop beats Boeing in $3.8 bln tanker service work

* Contract awarded after lengthy delay

* Northrop replaces Boeing in KC-10 maintenance work

* Boeing disappointed, reviewing Air Force decision
(Adds Boeing comment)

WASHINGTON, Oct 1 (Reuters) - Northrop Grumman Corp (NOC.N)
beat rival Boeing Co (BA.N) to win a major $3.8 billion
contract to maintain and service the U.S. Air Force's fleet of
KC-10 refueling tankers, the Pentagon said on Thursday.

Boeing holds the current contract for servicing the
aircraft, which expires in January, and has provided support
for the KC-10s for more than a decade.

Boeing said it was disappointed by the Pentagon's
decision.

"We presented a competitive proposal that leveraged
Boeing's tremendous experience from over 80 years of building
and maintaining tankers as well as inventing boom technology,"
Boeing spokesman Forrest Gossett said.

"We now need to review the Air Force's selection decision
and process before deciding on our next course of action."

Large Pentagon contracts are often appealed to the U.S.Government Accountability Office, the audit arm of Congress.

The Air Force had planned to award the contract in June
2008, but a decision was delayed because bidders submitted
insufficient cost and pricing data.

"This is a stunning upset," said defense analyst Loren
Thompson with the Virginia-based Lexington Institute. Boeing
has been servicing this plane since it was first introduced,
Thompson said, adding "so for Boeing to lose to Northrop is
truly amazing."

Northrop, with its European partner, Airbus-maker EADS
(EAD.PA), is also in a battle with Boeing to win a contract to
supply at least 179 new tankers to the Air Force, work that
could be worth up to $50 billion.

The Air Force's oldest tankers are the KC-135s, some of
which are 50 years old.

The Air Force's refueling fleet includes nearly 60 KC-10s,
which were purchased in the 1970s and are modified DC-10
aircraft made by McDonnell Douglas, which was bought by Boeing
in 1997.
(Reporting by Julie Vorman and Andrea Shalal-Esa; editing by
Andre Grenon and Tim Dobbyn)