* Minister says award to EADS would be positive sign
* Says US counterparts assured him process would be fair
* Contract announcement expected in February or March
(Adds quotes, background, byline)
By Andrea Shalal-Esa
WASHINGTON, Feb 8 France is confident that the
U.S. government will conduct a "free and fair" competition
between Boeing Co (BA.N) and Europe's EADS EAD.PA for an
order of refueling planes valued at up to $50 billion, French
Defense Minister Alain Juppe said during a visit to
"We are confident in the process ... We are certain that
this competition will be free and fair," Juppe said in response
to questions after addressing the Washington-based Carnegie
Endowment for International Peace.
"We have been reassured by our counterparts in America,"
said Juppe, who met earlier Tuesday with Defense Secretary
Juppe's remarks came as Boeing and EADS prepared to submit
final bids on Friday in the long-running competition, paving
the way for the U.S. Air Force to award a contract for 179 new
refueling planes in February or March.
Juppe said a decision by the U.S. Air Force to once again
award the contract to EADS would be a welcome sign of deepening
cooperation between Europe and the United States, but said an
award to Boeing would not necessarily signal conflict.
The Air Force awarded a contract valued at up to $35
billion to EADS and Northrop Grumman Corp (NOC.N) in February
2008, but the Pentagon later canceled the deal after government
auditors upheld parts of a Boeing protest.
EADS decided last April to submit a bid of its own after
Northrop quit the competition and the Pentagon gave EADS 60
additional days to submit a proposal.
"If the message is positive for EADS, it will be a good
signal for the cooperation between Europe and the United
States. If it is not, it will not be the signal of a conflict
or a misunderstanding," Juppe said.
France holds a stake of about 15 percent stake in the
French-German company, but has no say over its strategy.
French President Nicholas Sarkozy weighed in on the bitter
competition last year during a meeting with President Barack
Obama. He said Obama had assured him that the competition would
be completely transparent and that EADS would bid on its own if
the terms of the competition were fair.
The Pentagon announced a day after Sarkozy's visit that it
would extend the deadline for tanker bids by 60 days, a move
criticized by Boeing backers in Congress, who accused the
Pentagon of bending its rules to placate Europe.
This is the Air Force's third attempt since 2001 to begin
replacing its aging fleet of KC-135 refueling planes, which are
over 50 years old on average.
Congress killed the first deal, a lease-buy agreement with
Boeing, in 2004 amid a huge procurement scandal that saw a
former top Boeing official and a former Air Force weapons buyer
sentenced to prison for violating federal ethics rules.
The latest round of the bitter transatlantic competition is
nearing a pivotal moment against the backdrop of a longstanding
trade dispute between Europe and the United States.
The World Trade Organization has ruled that both Airbus and
Boeing have benefitted from illegal subsidies from their
respective governments for large passenger aircraft. But the
two sides remain at odds over the amount of subsidies, and the
issue is likely to remain in litigation for some time.
(Editing by Bernard Orr)