March 26, 2008 / 10:08 PM / 10 years ago

UPDATE 1-Northrop files to dismiss Boeing tanker protest

(Adds details, Boeing statement, background)

By Andrea Shalal-Esa

WASHINGTON, March 26 (Reuters) - Northrop Grumman Corp (NOC.N) said on Wednesday it asked the Government Accountability Office to dismiss the bulk of a Boeing Co (BA.N) protest against the Air Force’s decision to award Northrop and Europe’s EADS EAD.PA a $35 billion refueling aircraft program.

The Air Force decision has sparked controversy in Congress, where some lawmakers have vowed to block funding for the Northrop deal, which they argue will shift valuable aerospace jobs to EADS’s Airbus, a longtime rival of Boeing.

“Much of what Boeing complains about was contained in the KC-X request for proposals and should have been questioned, and even perhaps protested, before the submittal of Boeing’s final bid,” said Northrop spokesman Randy Belote.

Chicago-based Boeing filed its protest with the GAO, the nonpartisan congressional agency that evaluates contract disputes, on March 11. It argued its bid was evaluated unfairly and the competition was seriously flawed.

GAO is due to rule on the matter by June 19.

The Air Force rejected Boeing’s offer on Feb. 29 and awarded the contract for 179 new aerial tankers, which provide fuel to fighters and other warplanes, to Northrop and Airbus.

Northrop said many claims raised in Boeing’s protest motion were “untimely” and should be dismissed because they should have been filed before Boeing submitted its final proposal in early January.

Boeing attacked Northrop’s motion and it questioned why Northrop would want to halt the GAO’s review.

“We completely disagree with any effort to stop an unbiased review of the KC-X acquisition process,” said Boeing spokesman Bill Barksdale.

Los Angeles-based Northrop said Boeing waited too long to raise its challenge of various issues related to the capability of the Northrop tanker and the Air Force’s use of a complex computer model to assess the competing bids.

In addition, Northrop argues that Boeing’s challenges to the Air Force’s assessment of the companies’ past performance, and the issue of government subsidies, were either not a proposal requirement or should have been addressed earlier.

Boeing also knew long before it filed its final proposal how the Air Force had increased its cost proposal and evaluated its proposed development schedule, Northrop said.

“Filing a protest ... is extremely serious business,” Belote said, noting the contract involved an important weapons system urgently needed by the military.

“While Northrop Grumman fully supports the protest process, Northrop Grumman filed this motion as an effort to clear the air and afford the GAO the opportunity to do its job without distractions.” (Editing by Andre Grenon)

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