EADS mulls tanker contract bid against Boeing

WASHINGTON (AFP) - EADS opened the door Friday to a bid against Boeing for a lucrative US Air Force tanker contract after the Pentagon signaled a flexible deadline to accommodate the European aerospace giant.

The European Aeronautic Defence and Space Company's expressed interest in the competition marked a new turn in the long-running 35-billion-dollar tanker contract saga.

Just last week EADS was forced to withdraw from the bidding after its lead partner, US defense contractor Northrop Grumman, refused to compete, alleging the requirements unfairly were skewed toward Boeing's smaller aircraft.

Northrop's exit from the competition left the field open to Boeing, arch-rival of EADS subsidiary Airbus.

The turning point appeared late Thursday, when the Defense Department acknowledged it would consider "a reasonable extension" to the bidding deadline after learning from EADS it may reenter the fray.

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"Yesterday the US Department of Defense (DoD) indicated it would welcome a proposal from EADS North America as prime contractor for the KC-X tanker competition," EADS said in a statement Friday.

"This is a significant development. EADS is assessing this new situation to determine if the company can feasibly submit a responsive proposal to the department?s request for proposal," the company said.

EADS welcomed the DoD's recent statement indicating willingness to extend the time frame.

"Though this is essential, it is only one factor in making a decision for EADS to compete. In the end, the company will only submit a proposal if there is a fair chance to win, after evaluating all relevant factors," it added.

EADS said "an important pre-requisite" for its consideration of entry into this competition would be "a significant extension to the period within which to prepare and submit a proposal."

The Defense Department, meanwhile, said that EADS was seeking a 90-day extension of the deadline.

"They've indicated to the department that they would like to see us extend the time frame 90 days," Pentagon spokesman Bryan Whitman said Friday. The tendering process is due to close around mid-May.

"We would consider reasonable extensions," Whitman said, adding that the "next step is for them to give us some specifics in terms of what they need the additional time for."

EADS North America's spokesman Guy Hicks declined to comment on Whitman's remarks and referred questions back to the Pentagon.

The Pentagon spokesman confirmed that EADS could bid to be the sole contractor without a US partner "as long as they meet the requirements."

The Northrop-EADS withdrawal from the race to supply 179 aerial refueling tankers has triggered a firestorm of protest in Europe.

French President Nicolas Sarkozy and German Chancellor Angela Merkel this week accused Washington of bias in favor of the all-American Boeing plane.

EADS on Friday complained that the Pentagon had not addressed its concerns that the current bid requirements favor "a smaller, less capable aircraft, and that the additional combat capability offered by our system may not be fully valued."

The Northrop-EADS team originally won the contract in February 2008, but the deal was canceled after Boeing successfully appealed the decision to the investigative arm of Congress.

In 2003, the Pentagon awarded a contract to Boeing but later suspended it after an ethics scandal involving a company executive and an Air Force official. The Air Force official was later convicted of criminal conspiracy.

Military commanders view the planned KC-X aircraft as crucial to sustaining US air power and are anxious to replace the older Boeing KC-135 Stratotankers that date back to the 1950s.