Boeing to study its options for tanker contract

MINNEAPOLIS -- Boeing said on Thursday that it is reviewing its options for bidding on a $35 billion contract to make Air Force tanker planes.

At the moment, Boeing Co. is the only announced bidder for what is expected to be a 179-plane order. But on Wednesday the Pentagon said it might extend the May 10 bidding deadline by two months to give European competitor EADS a chance to re-enter the process.

EADS and former partner Northrop Grumman pulled out of the bidding for the long-awaited contract last month.

Boeing, based in Chicago, said it is prepared to bid by May 10, but will "review all of our options for going forward" while waiting for a final decision on the deadline. A Boeing spokesman declined to say whether the company means it will bid later, or is considering not bidding at all, or some other possibility.

Defense analyst Loren Thompson of the Lexington Institute thinks he knows what Boeing means.

"If it feels that anything is being done to advantage its competitor, it will file a protest or take other legal action," Thompson said.

He predicted that EADS will not bid. Northrop Grumman Corp. pulled out because it felt that the bidding process was tilted toward Boeing, and that process hasn't changed, Thompson said.

EADS and other critics of the Pentagon's bidding process have said the terms appeared designed to favor a smaller jet offered by Boeing.

In its statement on Thursday, Boeing accused EADS of trying to delay the tanker program and shift the bidding process in its favor.

"We do not see a legitimate reason for EADS's bid deadline extension request, and we believe an extension that favors any individual competitor does not further the goal of ensuring fair competition," Boeing said.

EADS has said that a 90-day extension was the minimum it needed to prepare a bid. It said it would consider the Pentagon's offer of a 60-day extension.

"We understand the time-sensitivity of this process, and we're moving forward quickly, but we're moving forward in a deliberate way that will allow us to make the decision to bid or not," EADS North America spokesman Guy Hicks said.

Boeing shares rose 38 cents to close at $72.99.