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Northrop Grumman gets $3.8-billion Air Force deal

The Century City defense contractor beats Boeing for a nine-year contract to provide logistics services for a fleet of KC-10 aerial refueling tankers.

October 02, 2009|Associated Press

WASHINGTON — Northrop Grumman Corp. beat out rival Boeing Co. for a $3.8-billion deal to provide logistics services for a fleet of KC-10 aerial refueling tankers, the Pentagon said Thursday.

Boeing, based in Chicago, builds the KC-10 and holds the current service contract for the plane, which is set to expire in January. It has been providing 24-hour service seven days a week on the aircraft since 1998.

Boeing expressed disappointment over the Air Force's selection, saying it would review the decision before taking any further action. Based on merits, the company can choose to appeal the service's decision.

"Northrop has taken away from Boeing a franchise it's owned for a quarter-century," said Loren Thompson, a defense consultant for the Lexington Institute.

The nine-year contract is expected to bring 150 to 300 jobs to the area of Lake Charles., La., the offices of U.S. Sens. Mary L. Landrieu (D-La.) and David Vitter (R-La.) said Thursday.

Shares of Century City-based Northrop declined $1.67, or 3.2%, to $50.08. Boeing dropped $2.04, or 3.8%, to $52.11.

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