WASHINGTON (AFP) -- Northrop Grumman and its European partner EADS threatened to pull out of a multi-billion-dollar tanker contract, accusing the Pentagon of favoring its rival Boeing.

In a letter to the Pentagon's acquisitions chief, Northrop president and chief executive Wes Bush deplored a “clear preference” in the draft request for proposal “for a smaller aircraft with limited multi-role capability” than the modified Airbus A330 proposed by his group and Airbus parent EADS.
He said his company remained convinced that its proposed aircraft would provide the “best capability” for the U.S. military and the taxpayer.
According to Northrop, the Defense Department is focusing on the competitors' prices, rather than on the technical features of the aerial refueling planes. Bush wrote to Defense Undersecretary for Acquisition, Technology and Logistics Ashton Carter that the Pentagon “is not planning to substantially address our concerns in the final release of the RFP.”
“For all of the reasons we have provided, Northrop Grumman cannot proceed to submit a bid to the Department against the RFP as currently structured,” Bush said in his letter, a copy of which was obtained by AFP.
A Pentagon spokesman said the Defense Department was not prepared to change the requirements for the 35 billion dollar, 15-year contract and denied favoring either aviation group.
Copies of Bush's letter were also sent to Deputy Defense Secretary William Lynn and to U.S. Air Force Secretary Michael Donley.
EADS spokesman Guy Hicks said the company “shares the concerns” outlined by Bush.
Northrop and EADS have accused the Pentagon of disclosing sensitive price details from their bid for the tanker contract in the previous round of competition that could give Boeing an edge in a new contest.
Defense officials have rejected Northrop's allegations, saying that disclosing the information did not violate federal regulations and that the details were outdated and not pertinent to the new round of bidding. The Defense Department “regrets that Northrop-Grumman and Airbus have taken themselves out of the tanker competition and hope they will return when the final RFP is issued,” Pentagon spokesman Bryan Whitman said. “The Department has played this right down the middle and will continue to do so … both companies can make a good tanker.” Both sides have proposed changes to the competition that would favor their offer, he added.
The Pentagon has been reviewing comments on a draft request for proposal and plans to issue the final document for the competition “probably in January.” The US Air Force's two previous attempts to find a replacement for its KC-135 air refueling tanker -- launched in February 2008 -- have been plagued by scandal, furious lobbying and political controversy.
Northrop and EADS were awarded the contract last year but Boeing managed to overturn the decision on appeal, with federal auditors concluding the competition had been flawed.
A new competition was announced in September to build 179 aerial refueling tankers to replace the aging tanker fleet.
Both Northrop and Boeing have fierce advocates in Congress who have already accused the Pentagon of bias in setting terms for the bidding.
Political stakes are also high in the case. Lawmakers from states with Boeing production sites were furious at the air force last year for having initially awarded the contract to a European company.
Representative Norm Dicks, a Democrat from Boeing's manufacturing hub in Washington state, dismissed Northrop's letter as a “familiar tactic intended to pressure the Pentagon into expanding the specifications of the tanker beyond its stated requirements.”
“I sincerely hope the air force will not yield to this pressure,” he added, saying the Pentagon has “full authority” to issue a contract even if Boeing remains the sole bidder.
Republican Senator Richard Shelby of Alabama, who has already criticized the revamped competition rules, blasted the current framework as a “sham” and “practically a sole source contract to Boeing.”