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UPDATE 1-Pentagon to decide tanker contest structure soon

 * Gates: within days of decision on shape of contest
 * Gates still hoping for proposal request by midsummer
 (Adds quotes, background)
 WASHINGTON, June 18 (Reuters) - The Pentagon will decide
"within a few days" how to structure the next attempt to award
a multi-billion-dollar contract to replace the Air Force's
aging tanker fleet, Defense Secretary Robert Gates said on
Thursday.
 Last year, the Pentagon canceled a $35 billion, 179-plane
 contract it awarded to Northrop Grumman Corp NOC.N and its
partner, Airbus parent EADS EAD.PA, after federal auditors
upheld a challenge from losing bidder Boeing BA.N.
 "On the tanker, I'm probably within a few days of making a
decision on the structure of how we're going to go about the
process and who will be the acquisition authority and so on,"
Gates told reporters.
 "And I still am hoping that we can get an RFP (request for
proposals) out midsummer or thereabouts," he said.
 At the Paris Air Show this week, Boeing said it had studied
both its 767 and larger 777 aircraft for use in the new tanker
competition but would not decide which plane to bid until the
Pentagon released the terms of the contest. Northrop had won
with a modified Airbus A330.
 The Pentagon's request for proposals will launch a third
effort to buy new refueling planes.
 The Air Force's first bid to replace its aging fleet of
KC-135 refueling aircraft centered on a lease/buy deal with
Boeing for 767s, but that collapsed in 2004 in a procurement
scandal that sent two Boeing executives, one a former Air Force
arms buyer, to prison for ethics violations.
 Northrop won the second competition, which was carefully
monitored by Pentagon officials, but government auditors still
upheld 8 of over 100 protest points raised by Boeing.
 Analysts say both sides may file protests once the Pentagon
releases its request for proposals, if they perceive the rules
are tipping the competition toward one competitor or another.
 (Reporting by Julie Vorman; Editing by Tim Dobbyn)

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