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Source: EADS seeking new tanker-bid partner

The U.S. Air Force’s $35 billion KC-X competition may not end up being a sole-source competition. It appears that EADS is looking to buy time to find a new partner to bid against tanker rival Boeing.

“We’re hearing that EADS has approached [the U.S. Defense Department] and asked for an extension to the tanker bid submittal deadline,” which is in mid-May, one congressional aide said March 12.

A DoD official said later in the day, “We are neither encouraging or discouraging EADS from bidding. That said, it’s not uncommon for us to extend RfPs a reasonable amount of time. But we haven’t been asked to do so in this instance.”

Meanwhile, Pentagon acquisition chief Ashton Carter dodged questions from reporters on the matter during a March 12 news conference at the Pentagon. All Carter would say is that the Pentagon “values the contribution of European industry to the choices that we can make as a department.” He said that although the Pentagon doesn’t have “an indication of any additional bidders, DoD is happy to have a competition.”

EADS North America spokesman Guy Hicks said March 12, “We don’t comment on any communications between [EADS] and our customers.”

One senior EADS official said earlier this week that he had serious doubts the company has enough time to find a new U.S. partner that could handle a $35 billion deal, such as Lockheed Martin, L-3 Communications or Raytheon.

However, Raytheon issued a cryptic statement March 12 when asked whether company officials were in talks with EADS about a tanker partnership.

“We have the technology and capabilities to support the tanker program in a number of ways, but we have to refer [inquiries on the matter] to EADS,” a company spokeswoman said.

Lockheed and L-3 were unavailable for comment at press time.

Three U.S. lawmakers with large numbers of Boeing employees among their constituents — Sen. Sam Brownback, R-Kan., Sen. Pat Roberts, R-Kan., and Rep. Todd Tiahrt, R-Goddard, responded March 12 to reports of EADS’ deadline request: “Delay is unacceptable. Dragging out this competition hurts our warfighters and costs the taxpayer,” Brownback said.

Several analysts said time may have run out for EADS.

“Finding someone else would be tough to do unless they have already done the groundwork” to establish a brand new KC-X partner, Center for Strategic and Budgetary Assessments Senior Fellow Mark Gunzinger said March 10.

Richard Aboulafia of the Teal Group was even more dubious, saying in a March 9 e-mail when asked whether he thought the Air Force might grant EADS extra time to put together a new tanker partnership: “Hell, no. EADS today said they were withdrawing — period.”

Aboulafia was referring to comments made that day by EADS Chairman Louis Gallois.

“When Northrop Grumman, which is one of the most important defense suppliers in the United States, makes the analysis that they have no chance to win, I don’t think that we have more chance going alone,” he said. “That’s clear for us.”

Loren Thompson of the Lexington Institute said neither Raytheon nor L-3 can manage a large aircraft production program. “They’ve never built a tanker,” he said. “This whole thing sounds unlikely.”

In March 10 testimony, Air Force leaders told lawmakers they intended to move ahead with program as scheduled.

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John T. Bennett and Vago Muradian contributed to this report.