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US DoD offers 60-day extension for EADS tanker bid

Boeing and a bipartisan group of US senators have urged the Department of Defense to scrap a proposed 60-day extension to the bid deadline for the US Air Force's KC-X tanker contest, saying the move would unfairly advantage EADS.

The Pentagon had set 10 May as the last day to receive responses to its final request for proposals for the 179-aircraft KC-X deal, but announced late in March that this could be moved to 9 July if EADS decides to make a bid.

The company's continued involvement in the projected $35 billion contest has been in doubt since its US partner Northrop Grumman opted against submitting a proposal based on the Airbus A330-200-based KC-45.

"We are committed to a fair, open and transparent competition to get the best airplane to our warfighters at the best value to the taxpayers," the DoD says. "It is not uncommon to grant a reasonable extension in competitions of this sort, and we consider 60 days to be reasonable."

EADS is expected to make a decision this week on whether to bid as prime contractor for the deal, and is believed to be have been discussing possible last-minute partnering agreements with other US companies.

However, EADS North America responded to the DoD's 60-day offer by saying it has "firmly indicated that a 90-day extension would be the minimum time necessary to prepare a responsible proposal." It also believes that the current RFP "clearly favours a smaller, less capable aircraft" than the KC-45.

Boeing reacted angrily to the proposed DoD action, and again raised the issue of illegal European state subsidies to Airbus, which were recently identified in a World Trade Organisation ruling.

"Boeing remains fully prepared to submit a competitive proposal by the 10 May deadline," the company says, with its proposal to be based on the 767-based NewGen tanker.

"However, this latest development, along with the WTO's recent final ruling, requires Boeing to review all of our options for going forward while we wait for a final determination on a deadline extension. We believe an extension that favours any individual competitor does not further the goal of ensuring fair competition."

Five US senators added their weight to the Boeing appeal in a 7 April letter to defence secretary Robert Gates. "EADS seems intent to use illegally subsidised aircraft to significantly increase its presence in the US defence market. While this may represent a sound business strategy, it does not represent the best interests of the American warfighter, worker or taxpayer," they wrote.

The senators also voiced alarm over the DoD's proposal to accelerate its assessment of the final bids after the proposed extension period to allow the winning bidder to start production "in early fall".

"Compressing the bid evaluation timeline given the problematic history with this source selection process concerns us greatly," they say.

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