EU alarm over tanker bid rules

13:25, March 10, 2010      

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European trade chiefs Tuesday queried tender rules for a $35-billion US Air Force aerial refueling tanker plane contract after Europe's EADS pulled out of the race.

"The European Commission would be extremely concerned if it were to emerge that the terms of tender were such as to inhibit open competition for the contract," a statement from Brussels said.

US plane-maker Boeing is poised to win the contract after rival partners Northrop Grumman and EADS dropped out.

Northrop Grumman and EADS charged that the US Air Force's requirements for the KC-X tanker program were skewed in favor of US rival Boeing.

"It is highly regrettable that a major potential supplier would feel unable to bid for a contract of this type," said European Union Trade Commissioner Karel de Gucht.

France, home to EADS' subsidiary Airbus that was to have made the planes, warned the US implicitly that Europe will study the "possible implications" of a Pentagon decision to skew bidding in favor of a US firm.
"France, with the European Commission and its European partners will examine this new development and its possible implications," said French foreign ministry spokesman Bernard Valero.

The Northrop-EADS team had won the contract in February 2008, but the deal was canceled after Boeing mounted massive protests and successfully appealed to the Government Accountability Office, the investigative arm of Congress.

As the arguments escalate, the Air Force was instructed to come up with new, clearer specifications and now is expecting new bid submissions after it refreshed requirements last month.

However, the following Pentagon's revised bid requirement "clearly favors Boeing's smaller refueling tanker," Northrop Chief Executive Officer Wes Bush was quoted Monday by the marketwatch website as saying in a blunt statement.

The judgement was also shared by the EADS, who had posted a net loss for 2009 owing to huge cost over-runs on its separate A400M military transport plane for NATO clients.

With the exit of Northrop and EADS, Boeing is in prime position to snare the contract to replace the 1950s-era aging fleet of Boeing tankers and is scheduled to submit its proposal by May 10.

The EU statement underlined that the US defense trade balance with the EU has tradi-tionally been "significantly in the US' favor," citing 2008 figures running to $5 billion of US defense exports against only $2.2 billion' worth of imports.

Source: Global Times
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