Northrop drops out of tanker competition

March 8, 2010 1:49:29 PM PST
Northrop Grumman Corp. says it won't compete against Boeing Co. for a $35 billion contract to build refueling tankers for the Air Force because it doesn't think it can win.

Northrop's chief executive officer and president, Wes Bush, said Monday that the Pentagon guidelines for the program favor Boeing's smaller refueling tanker and does not provide what Bush calls "adequate value recognition" of the added capability of a larger tanker.

That, according to Bush, precludes Northrop from any competitive opportunity.

The Obama administration had said such sole-source contracts aren't a good deal for the taxpayer. But industry insiders say there's no other company poised to meet the Air Force's guidelines for the program.