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Air Force Tanker: What's Taking So Long With It?

From The Seattle Times: "Air Force tanker guidelines to come next week". That was written August 21st. Wrong.

From The Financial Times: "An announcement of the requirements, or request for proposals, could come as early as tomorrow." That was written Monday. Also wrong.

Seems like Michael Phelps will be swimming in the Olympics again before we get a new Air Force refueling tanker.

The Pentagon originally planned to send its final request for bids to Boeing and Northrop Grummanby mid-August. This would help the military meet its goal of making a final decision by the end of the year. But we're two weeks behind schedule already, and the Defense Department told me yesterday that the request might not come this week, either.

What's the delay? Two schools of thought. One is that the Pentagon is working hard to make sure the request is as "protest proof" as possible. The second theory is that the Pentagon may, in fact, be changing its request to give Boeing some of the extra time it's demanding. Boeing has threatened to drop out of the competition unless it's given six months to put together a bid for a bigger tanker than it originally proposed, based on what the Air Force now clearly wants.

The Pentagon was hoping to get bids in six weeks, not six months.

What are analysts saying?

Deutsche Bank says that even as Boeing asks for more time, Northrop Grumman is also considering putting up a new plane, citing a report in Flight Global. "We believe the revised Northrop/EADS offer could be based on the A330F," says the analyst, "but will unlikely be materially different from their last offering."

Bank of America says the Pentagon "does not have any particular leverage to encourage Boeing to dance to its tune." Still, "We tend to think it unlikely that Boeing would ultimately fail to provide a bid, despite the rhetoric." The analyst believes, however, that no decision will be made until we have a new President in office.

Yes, but do you mean the President taking office in January 2009? or 2013?

BUSINESS IN A YOUTUBE WORLD
I believe this is a first! As machinists vote on whether to strike Boeing, the company put its best and final offer up on YouTube!

Questions? Comments? Funny Stories? Email funnybusiness@cnbc.com

  • 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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