Seattle has another great reason to celebrate!

Boeing wins huge Air Force tanker contract

The Air Force awarded its $35 billion air-refueling tanker contract Thursday to Boeing.

By

Dominic Gates

Seattle Times aerospace reporter

The Air Force awarded its $35 billion air-refueling tanker contract Thursday to Boeing, Congressional sources said shortly before the announcement was to be made this afternoon.

Boeing will build its 767 tanker on a newly opened assembly line at the back of its Everett widebody jet plant.

 Winning the tanker contract secures what Boeing says are 11,000 direct and indirect jobs in Washington State. That figure includes not only projected jobs at Boeing and at its in-state suppliers, but also at any kind of business — from bars to bakeries — serving the aerospace workforce.

 Boeing was originally awarded a tanker contract in 2001, but that deal, which was never open to competitors, was swamped in controversy. It was canceled after a procurement scandal that sent Boeing's then-chief financial officer to jail.

 In 2008, after an open competition, the contract was awarded to a joint bid from Northrop Grumman and Airbus parent company EADS. The award was canceled after Boeing challenged the procedures leading to the decision.

 This time around, Northrop withdrew and it was a straight head-to-head contest between Boeing and EADS.

Though the Air Force award will draw the ire of politicians in southern states that would have benefited from an EADS win, the decision may finally bring the decade-long saga to a close.

 EADS now has three days to ask for a debriefing as to why exactly it lost. That debriefing must take place within five days, after which EADS has another five days to decide if it wants to formally protest the decision.

Ralph Crosby, head of EADS North America, recently told the Press-Register newspaper in Mobile, Ala., that absent "some egregious process error," his company was unlikely to contest a Boeing win.

 The outcome is a bitter disappointment for EADS.

 It had also wanted a manufacturing facility in the U.S. that would have brought revenue in dollars — valuable as the euro rises against the dollar.

With expectations that Airbus could price its plane lower than Boeing, and leaks suggesting that the EADS A330 had outscored the Boeing 767 on a key mission evaluation that was part of the Air Force assessment, analysts had recently been predicting an EADS win.

With the outcome reversed, the happiest man at Boeing may be commercial airplanes chief Jim Albaugh, who was on a flight back from Texas to Seattle as the announcement was made.

Albaugh took over the defense side of the company in 2002 and closely shepherded Boeing's tanker bid afterward.

 Having switched roles to head Boeing's commercial jet division in the fall of 2009, Albaugh will now get to oversee the building of the tanker.

The European planemaker had hoped to establish itself as a peer with U.S. companies in bidding for majordefense contracts in the future.Dominic Gates: 206-464-2963 or dgates@seattletimes.com