In a high-stakes rivalry pitting two of the world's largest defense contractors, Northrop Grumman Corp. gambled and won.
The word came down Feb. 29 from the U.S. Air Force that a contract worth up to $40 billion for aerial refueling tankers would go to Northrop and its partner, Airbus, a unit of Netherlands-based European Aeronautic Defence and Space Co. Shut out was rival Boeing Co., which thought it had a winner.
It was a decision likened to last month's stunning Super Bowl loss by the heavily favored New England Patriots, with the favorite losing a cliffhanger. The contract is expected to be the last new major Pentagon purchase for at least a decade, and Boeing has been mulling over whether to challenge the decision.
The reasons behind the military's decision are only starting to emerge, but experts point to little-noticed moves by Northrop that may have given the edge to its tanker, which will be able to carry more fuel and troops than the plane offered by Boeing.
In a highly risky move, Northrop, the largest industrial employer in Maryland with nearly 11,000 workers, threatened at one point to pull out of the competition if the Air Force didn't change the way the aircraft would be evaluated.
The demand paid off.
"Boeing allowed Northrop to skillfully shape the criteria for selecting the winning plane," said Loren B. Thompson, a defense policy analyst who closely followed the tanker competition. "In particular they allowed Northrop to shape a scenario that made its larger plane more appealing."
The Air Force wants to buy 179 planes - to be called the KC-45A - that can be used to refuel fighters, bombers and transport planes in the air. They also will be used to carry cargo and passengers. The new planes will replace KC-135 tankers that were built in the late 1950s and early 1960s.
How Northrop upset Boeing is expected to be at the heart of a broader inquiry by Congress this spring as "buy America" proponents argue that major U.S. military contracts should not lead to jobs being sent overseas. The Northrop-Airbus proposal calls for converting new Airbus 330 passenger jets, currently built in Toulouse, France, into tankers. Northrop said the planes for the Air Force would be assembled in Mobile, Ala.
The contract announcement surprised Boeing and its supporters, who thought the Air Force had long favored its tanker candidate, a modified version of the 767 jetliner.
