UPDATE 1-NATO may spend $700 mln on Boeing cargo planes

(Adds details, background)

WASHINGTON, May 9 (Reuters) - The Bush administration told
Congress on Friday of plans to sell two well-equipped Boeing Co
(BA.N: Quote, Profile, Research, Stock Buzz) C-17 cargo planes to the North Atlantic Treaty
Organization (NATO) for up to $700 million.

The Pentagon's Defense Security Cooperation Agency said
NATO, along with Sweden and Finland, asked to buy two C-17s
equipped with missile warning systems, spare parts, crew armor
and mission-planning system software.

The new NATO Airlift Management Organization will purchase
and manage the cargo planes, and a multinational military unit
to be named the Heavy Airlift Wing will conduct airlift
operations, the agency said in a statement.

"The C-17 will partially serve NATO's agreed military
requirement for eight C-17 equivalents to rapidly deploy a
force around the globe," the agency said.

Currently, NATO does not have its own heavy airlift
capability and typically uses either U.S. Air Force airlift or
contract carriers that use Russian heavy airlift aircraft, it
said.

NATO plans to base the cargo airplanes at Papa Air Base in
Hungary, and about 50 U.S. Air Force personnel will be
stationed there with the Heavy Airlift Wing, the agency said.

The notice of a proposed sale is required by U.S. law and
Congress has the power to reject it.
(Reporting by Julie Vorman; Editing by Braden Reddall)