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Northrop Grumman On Boeing Tanker Challenge: Enough Already

Northrop Grumman
AP
Northrop Grumman

I'm hearing the Government Accountability Office will not decide on the Boeing challenge to the $35 billion tanker contract today. That probably means it WILL happen today (kidding, I think). The decision may come down tomorrow. It has to come down by a Thursday afternoon deadline.

Some believe that no matter what the GAO decides, the tanker deal will continue to remain in a holding pattern. Here's my question: what happens if the GAO rejects the overall challenge, but concedes some points in Boeing's favor? There are those who believe the new management at the Air Force may move cautiously if that happens. "The Air Force is in a very touchy moment here,'' analyst Loren Thompson from the Lexington Institute told Reuters. An unnamed senior Pentagon official added, "It's going to be a real problem.''

Now Northrop Grumman has released a statement basically saying, "Enough, already." If the GAO rules against Boeing, the would-be victor says it's time to move on. "While Boeing was within its rights to protest," says Northrop's Randy Belote, "it has knocked the program three months off schedule. Further delay will achieve nothing but an increase in cost and risk."

Northrop points out that the military has been trying to replace the tankers since 2001, and that the current KC-135 tankers cost more to fly than the new ones will. Northrop also says delaying new tankers threatens to siphon off the funding already set aside to other defense programs.

Finally, Northrop says a loss by Boeing at the GAO would be strike two. "Two in a row should be enough," Belote says. "It is our hope that anyone considering delaying this program any further, for any reason, would weigh their parochial desires against our shared patriotic duty to provide the new tanker to our men and women in uniform as soon as humanly possible."

Northrop Grumman may consider two strikes enough to call someone out. In baseball, you get three. If Boeing sees enough reason to keep fighting, time for the seventh inning stretch.

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  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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