In a highly risky maneuver, Northrop has informed the Pentagon that it will drop out of the $35 billion Air Force refueling tanker competition unless the draft request for proposals is changed significantly. In Northrop's opinion, the guidelines for the competition are constructed in such a way that it would favor the smaller and less expensive Boeing 767 Tanker proposal. Although Northrop's entry, based on an Airbus A330 airframe, would cost more per aircraft, its bigger size would translate into additional fuel and cargo capacity. Final bids are still not due until January 2010. The Pentagon's response is that they will not make any changes to their request for proposals (at least for right now anyways). Furthermore, although it would be ideal to have two competitors vying for the contract, they can't force Northrop to bid. If Northrop indeed follows through with opting out, that means that Boeing would most likely be awarded the contract. Although it looks like the Pentagon is holding firm, the political winds may be strong enough to force them to change the requirements. Time will tell if Northrop's "posturing" move works or not.
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