WASHINGTON — The chronically troubled effort to build a new fleet of aerial refueling tankers for the Air Force was delayed yet again after Defense Secretary Robert M. Gates announced Wednesday that the competition that selected Northrop Grumman Corp. was flawed and would be opened for the third time in seven years.
The decision is a blow to the Century City-based aerospace giant, which was the surprise winner of the $35-billion contract over archrival Boeing Co. in February. It's also a slap to the Air Force itself, which Gates said would be stripped of the authority to choose the airplane.
Northrop had said the contract award would have created more than 7,500 jobs for California's struggling aerospace industry, even though the planes would be assembled in Alabama. Its plan called for building the 179 tankers by modifying Airbus A330 passenger jets made by the European Aeronautic Defense & Space Co., or EADS.
Gates' decision came after a ruling last month by the Government Accountability Office that the Air Force mishandled the year-long competition by giving Northrop's bid more credit than it deserved and failing to reward Boeing, which had offered a tanker based on its 767 airliner, for some of its plane's capabilities.
At a Pentagon news conference, Gates said the competition would not start all over again, but instead Boeing and Northrop would be asked for amended proposals to deal with the GAO's criticisms. Gates said his office, and not the Air Force, would evaluate the new submissions. He predicted a new contract could be awarded by the end of the year.
"Industry, the Congress and the American people all must have confidence in the integrity of this acquisitions process," Gates said.
But the Pentagon's top procurement official, Undersecretary of Defense John J. Young Jr., acknowledged that either company could legally submit a completely revised bid -- which could delay the selection well into next year.
"They will have full license to totally change their proposals in the modification process," Young said.
One former Pentagon acquisitions official predicted the companies would push for a broader reexamination, pointing out that previous Air Force efforts to speed up new competitions have gone awry.
"It's sad because you should be able to do it that way," said the former official, who asked to remain anonymous because of the sensitivity of the competition. "But it hasn't worked before."
