Northrop Grumman Must Bid For Tanker Contract Again

GULFPORT (WLOX) -- It was touted as a contract that would fuel coffers in Mississippi and Alabama for years to come. But, the Pentagon has essentially ripped up that agreement. And it's told Northrop Grumman to resubmit a bid, if it wants to build the next generation of Air Force refueling planes.

The reaction to Wednesday's announcement by Defense Secretary Robert Gates was rather universal. Politicians in both Mississippi and Alabama said they welcomed the opportunity to prove once again that Northrop Grumman was the right company to build the refueling tankers. George Freeland is Jackson County's economic development director. "We still remain committed to the premise that the U.S. Air Force initially selected the best tanker and the best product for this country's airmen," he said.

That tanker was supposed to be built by Northrop Grumman in Europe and at Brookley Field in Mobile. However, the contract was basically revoked by Defense Secretary Robert Gates. "I've concluded that the contract can't be awarded at present because of significant issues pointed out by the Government Accountability Office," Gates said during a Wednesday news conference.

So Northrop Grumman and its competitor Boeing must submit new bids for the nearly $40 billion dollar tanker contract. That didn't sit well with Mississippi Senator Thad Cochran. "I am disappointed that Northrop will have to re-compete to build the new tanker," his statement said. "I am confident, however, that the Northrop Grumman/EADS submission is the best one, and will mean new job opportunities for workers in our State."

Unlike the first bid process which was run by the Air Force, the Department of Defense will choose which company builds the 179 new refueling tankers. "I believe the revised process will result in the best tanker for the Air Force at the best price for the American taxpayer," said Gates.

Northrop Grumman originally won the KC-45 contract. But, Boeing protested that decision in March. When the Government Accountability Office reviewed the case, it found eight instances where the Air Force mishandled the bidding process. That's when Defense Secretary Gates got involved. "We believe that we can complete all of this and award a contract by December," Gates told the media.

In both south Mississippi and south Alabama, winning the tanker contract was considered a major coup. Area economic development leaders anticipated an additional 1,500 jobs and a variety of new business opportunities being created for the region. Sen. Roger Wicker said those jobs are essential to Mississippi. "So I like to look on the bright side of it. I'm very optimistic about us still getting this contract," he said.

So are the corporate executives at Northrop Grumman. In a statement the company released, Northrop Grumman said, "The United States Air Force has already picked the best tanker, and we are confident that it will do so again. Our men and women in uniform deserve nothing less."

Governor Haley Barbour made a similar comment, when he said, "We expect the Department of Defense to get the best product for our military and taxpayers, and I expect that to be the Northrop-Grumman/EADS tanker."