Pentagon Postpones $35B Air Force Tanker Competition Until 2009

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The U.S. Defense Department said Wednesday that it will wait until the next administration to award a disputed $35 billion contract to build a new fleet of aerial refueling tankers.

The Pentagon canceled the latest round of bidding between Boeing Co. and Northrop Grumman Corp. for the 179 planes, and now plans to hold a new competition next year.

Northrop and its partner, European Aeronautic Defense and Space Co., the parent company of Airbus, won the contract earlier this year, but the competition was reopened after the Government Accountability Office found fault with the decision-making process.

“Over the past seven years the process has become enormously complex and emotional — in no small part because of mistakes and missteps along the way by the Department of Defense," Defense Secretary Robert Gates said in a statement. "It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment."

Rep. Rick Larsen, D-Wash., whose congressional district is home to the Boeing Everett factory, called the decision "great news for Boeing's workers."

But Rep. Jo Bonner, R-Ala., said he is "outraged" by the Pentagon's decision to punt the tanker decision. Bonner's district in southern Alabama would have stood to gain from the Defense Department's original awarding of the contract to European-based EADS over Boeing.

"I am, frankly, embarrassed for the DoD leadership. They have an urgent military need yet are simply giving up efforts to address that need. It is a very sad comment when our nation is engaged in two wars — in two different regions of the world — that DoD would abdicate its responsibility," Bonner said.

In August, new leaders of the Air Force acknowledged that the service lost its focus and must work to mend fences after a slew of contracting and nuclear-related missteps.

Air Force Gen. Norton Schwartz, the new Air Force chief of staff, told Pentagon reporters that he plans to use the reinstatement of about 14,000 jobs in the service to bolster its nuclear staffing and beef up intelligence and surveillance.

"I think the bottom line is we lost focus. We did. And that focus is coming back," said Schwartz, who was formally sworn in during a ceremony Tuesday morning. "I think fundamentally our service is sound. It doesn't mean we're perfect, and we certainly have work to do, things to fix, fences to mend."

This came after Gates fired the former Air Force secretary and chief of staff in June, blaming them for failing to address fully a series of nuclear-related mishaps.

His decisions were triggered largely by two major nuclear-related blunders by the Air Force. The first was the mistaken shipment to Taiwan of four electrical fuses for ballistic missile warheads. Then last August, an Air Force B-52 bomber was mistakenly armed with six nuclear-tipped cruise missiles and flown from Minot Air Force Base, N.D., to Barksdale Air Force Base, La. At the time, the pilot and crew were unaware they had nuclear arms aboard.

The Associated Press contributed to this report.