The process of awarding the contract has had a number of twists since it was proposed in 2001. The initial effort to lease new tankers from Boeing was terminated after a former Air Force procurement official was jailed for negotiating a $250,000-a-year job with the firm while she was reviewing multibillion-dollar bids, including Boeing's tanker proposal.
The Air Force took a year to come up with the terms of the new tanker competition and spent another year evaluating the proposals.
In February, the Air Force selected Northrop, which submitted a proposal to modify the A330 passenger jet that is currently built in France by the Airbus subsidiary of European Aeronautic Defense & Space Co. Parts for Northrop's plane would be made worldwide, with aircraft assembly in Mobile, Ala.
Boeing, which built the current fleet of KC-135 tankers, offered a modified, 767-passenger jet that it currently assembles in Everett, Wash. The proposal was widely considered the favorite, having won the initial bid that was later canceled.
But in an upset, the Air Force picked Northrop's proposal. That immediately drew the ire of Congress members from Washington and Kansas, where Boeing maintains large-scale operations. In March, Boeing challenged the award, arguing that the way the Air Force evaluated the proposals was flawed.
The decision was a gamble for Boeing, which hadn't protested an Air Force contract in more than a decade. Boeing's chief executive, James McNerney, risked antagonizing the Pentagon with his spirited defense of Boeing's case.
Boeing launched an aggressive public relations campaign -- publishing dozens of full-page advertisements in newspapers touting its plane and accusing Northrop of sending jobs overseas. Northrop responded by saying the accusations misrepresented its bid.
The publicity push even spilled over into YouTube.com, where a sarcastic video called "Merci McCain" thanked presumed Republican presidential nominee Sen. John McCain (R-Ariz.) for creating "tens of thousands of jobs for the French."
McCain led the congressional inquiry that resulted in the cancellation of the original lease contract with Boeing.
After the GAO released its decision Wednesday, McCain said his concern remained that the Air Force buy the best tanker at the best price.
"As I have under similar circumstances, I now urge the Air Force to carefully consider the GAO's decision and implement its recommendations as quickly as, and to the fullest extent, possible," McCain said in a statement.
