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Boeing demands that Air Force explain why rival got deal

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WASHINGTON — Boeing Co. on Tuesday said it wants the Air Force to immediately explain why it awarded a $35 billion aerial refueling tanker contract to rival European Aeronautic Defence and Space Co. and its partner, Northrop Grumman Corp.

Boeing, which has been supplying air-to-air refueling tankers to the Air Force for nearly 50 years and was widely expected to win the deal, will not decide whether to protest the decision until it is debriefed.

A March 12 debriefing is planned, an Air Force spokesman said. But many, including some within the Pentagon, want that date moved up.

By awarding the contract to Europe-based EADS and Los Angeles-based Northrop Grumman, the Air Force has touched off a furor in Congress, provoking questions about why a foreign company would receive such a high-stakes deal. The response has been strongest from lawmakers whose states stood to gain jobs had Boeing won the deal.

Boeing has 739 employees and 236 suppliers and vendors in Utah. But Northrop — which currently has 1,228 Utah employees — has said 220 jobs will be added in Utah with the contract, both in Northrop's operations and with four supplier companies.

The contract to build up to 179 tankers is the first of three Air Force awards worth as much $100 billion to replace its entire refueling tanker fleet over the next 30 years.

"It's important for us to understand how the Air Force reached their conclusion," Mark McGraw, a Boeing vice president, said in a statement. "The questions we are asking, as well as others being raised about this decision, can best be answered with a timely debrief indicating how our proposal was graded."

That sentiment was echoed on Tuesday by John Young, the Defense Department's undersecretary of defense for acquisition, technology and logistics. "Boeing is entitled to be debriefed," he said. "It's a matter of principle. It should be done right away."

Young said he is urging the Air Force to do the debriefing as early as Thursday.

The Air Force is also coming under pressure from Capitol Hill.

Sens. Maria Cantwell and Patty Murray, both Democrats from Washington, Sens. Sam Brownback and Pat Roberts, both Republicans from Kansas, are among the lawmakers who sent a letter to top Pentagon officials also requesting an Air Force briefing this week.

The Kansas congressional delegation on Tuesday asked Defense Secretary Robert Gates to suspend its award of the tanker contract until Congress can review the decision.

Boeing would have performed much of the tanker work in Everett, Wash., and Wichita, Kan., and used Pratt & Whitney engines built in Connecticut. The company says a win would have supported 44,000 new and existing jobs at Boeing and more than 300 suppliers in more than 40 states.

The EADS/Northrop Grumman team plans to perform its final assembly work in Mobile, Ala., although the underlying plane would mostly be built in Europe. And it would use General Electric engines built in North Carolina and Ohio. Northrop Grumman estimates a Northrop/EADS win would produce 2,000 new jobs in Mobile and support 25,000 jobs at suppliers nationwide.

Job creation, however, shouldn't be part of debate, Young said in a meeting with reporters on Tuesday.

"We can't consider factors such as where a factory is," he said. "Nobody wants to run the Defense Department as a jobs program."

Alabama Gov. Bob Riley also defended the Air Force decision Tuesday and said superior plane won out.

"If this comes down to 'We are going to give an inferior product to our war fighters to protect jobs,' that is a very critical mistake," he said at a news conference.

Meanwhile, officials with the International Association of Machinists and Aerospace Workers, which represents Boeing workers, are calling for Congress to pass legislation barring the Pentagon from awarding contracts to foreign companies that receive "anti-competitive" subsidies. The U.S. Trade Representative has filed a complaint against the European Union with the World Trade Organization charging the EU with providing unfair subsidies to EADS subsidiary Airbus for large civil aircraft.

Two top Air Force acquisition officials are scheduled to testify today about the contract before the House Appropriations Subcommittee on Defense.