WICHITA - The battle between Boeing and the team of Northrop Grumman and EADS for a multibillion-dollar aerial tanker contract is coming to end.
The Department of Defense is expected to announce sometime next week — perhaps as early as Monday — which company will win a contract to provide the Air Force with a new fleet of refueling tankers.
There’s a lot at stake for Wichita for what is potentially the largest defense program in Pentagon history.
If Boeing lands the contract, its Wichita facility would house a finishing center to assemble and test the tankers. That would create 300 to 500 jobs.
The contract also would create another 500 jobs with local suppliers, including Spirit AeroSystems, where workers would build the KC-767’s forward section.
Overall, the economic impact to Kansas will be about 3,800 jobs and $145 million a year, U.S. Sen. Pat Roberts and U.S. Rep. Todd Tiahrt said last month.
The initial contract for 179 tankers is expected to be worth about $40 billion over 10 to 15 years. With possible future orders, the contract could top $100 billion over 30 years.
“We’re very hopeful,” Boeing spokesman Bill Barksdale said Friday. “It has been quite a long journey for the Air Force and for the competitors. I think everybody is very anxious to see what happens next week.”
Northrop Grumman spokesman Tim Paynter said his team is optimistic.
“It’s an acquisition based on capabilities, and the capabilities of our aircraft have never been in question,” he said.
The Air Force’s selection team met this week at Patterson Air Force Base in Dayton, Ohio, to choose the winning proposal, said Lexington Institute defense industry analyst Loren Thompson.
On Monday, the Defense Acquisition Board -- made up of defense and senior policymakers -- plans to meet to determine a strategy to buy the tankers, he said. Thompson expects the senior policymakers to issue a memo on the contract once Congress is notified.
Most observers think Boeing is the favorite.
“Most of us have a gut feeling that Boeing is going to win,” Thompson said. But, he added, “We don’t have any hard and fast evidence to prove the point.”
The new tankers are vital, Air Force officials say. By the end of the decade, the Air Force’s current fleet of 531 KC-135 and 59 KC-10 aircraft will reach an average age of 50 years old.
Boeing and the Pentagon had reached a previous deal on replacement tankers in 2003. But the deal was voided after it was revealed that the top Air Force official involved in negotiations had met with a Boeing executive about going to work for the company.
For the latest contract, both companies submitted final proposals to the Air Force on Jan. 3.
Boeing’s KC-767 Advanced Tanker entry is based on its 767 commercial airliner.
A team of Northrop-Grumman and the European Aeronautic, Defence and Space Co. --the parent of Airbus -- is offering a tanker based on the Airbus A330 commercial airliner.
“These are both very good planes,” Thompson said. “Which is better suited to the mission really comes down to the way the Air Force wants to it to perform.”
The Air Force must decide whether it wants a larger number of smaller planes like the KC-767 to position around the world, or a smaller number of larger planes like the Airbus tanker.
For Boeing, winning this contract gives the company the opportunity to keep its 767 production line in operation and to continue its heritage of supplying tankers to the Air Force, Thompson said.
For Northrop Grumman, “the tanker program is an opportunity to break into a huge new business area that it previously had not participated in,” Thompson said.
The Northrop-EADS team has said it will do final assembly on tanker sections at a site in Mobile, Ala. Airbus said last month that if it wins the contract, it also will build freighter planes there, making it the company’s first assembly plant in the U.S.
A Boeing win creates and sustains more U.S. jobs, Thompson said, because its tanker has more U.S.-made content. Boeing says winning the contract would help it create or sustain 44,000 jobs around the country.
Northrop Grumman disputes the figure, saying a win for either company would mean roughly 25,000 jobs.
No one should expect the announcement to turn into immediate work for the winner, Thompson said. The loser is expected to protest and attempt to have the purchase split between the two companies, Thompson said.
A protest could take up to a year; pursuing a split purchase could add 18 to 24 months to the process, he said.
“If you were trying to sell airplanes and the biggest deal likely to come along in the first half of the century is won by your competitor, would you just say, ’Oh well?’ ” Thompson said.
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