KC-45A Program

The U.S. Air Force has awarded a $40bn contract to Northrop Grumman and EADS to build 179 KC-45A military refueling planes. In a controversial decision, the Air Force took the contract for the taker upgrade program away from Boeing, which had supplied the Air Force with refueling tankers for the past 50 years.

1. Contract value: $30-$40 billion over 10-15 years
2. Northrop Grumman will partner for the deal with the foreign-based company European Aeronautic Defense and Space Co. (EADS)
3. EADS now the second-largest foreign provider to the U.S. military, behind BAE Systems
4. Boeing is considering appealing

• Topix.net: KC-45A Program
• Google News: KC-45A Program
• The Independent: Boeing Considers Appeal After Losing $35BN Contract to EADS (March 3, 2008)
  • "Boeing lost the contract in spite of offering a cheaper proposal—believed to be worth around $35m per plane. However, analysts said they believed the US group would have a very slim chance of overturning the decision on appeal, '...because the Northrop plane seemed markedly superior,' said Loren Thompson, a defense industry analyst for the Lexington Institute."

• The Engineer: Air Force Opts for KC-45A Tanker (March 3, 2008)
• Business Week: Northrop/EADS Upsets Boeing (February 29, 2008)
  • Alabama Governor Bob Riley: "To say this is a great day for Alabama is a monumental understatement. This will go down in history as one of our greatest days."
• Financial Times: EADS stuns Boeing with $35bn USAF contract (February 29, 2008)
  • Boeing statement: "Obviously we are very disappointed. Once we have reviewed the details behind the award, we will make a decision concerning our possible options, keeping in mind at all times the impact to the warfighter and our nation."
• CNN: Northrop Grumman gets $40B deal to replace Air Force tankers (February 29, 2008)
  • Assistant secretary of the Air Force Sue Payton: "We had two very competitive offers in this competition. Northrop Grumman clearly provided the best value to the government."
• Reuters: Northrop sees U.S. tanker deal positive for growth (February 29, 2008)
• Associated Press: Northrop, EADS Win $35B Air Force Deal (February 29, 2008)
• BBC News: EADS wins $40bn US aircraft deal (February 29, 2008)
• Bloomberg: Northrop Beats Boeing for $35 Billion Tanker Program (February 29, 2008)