Northrop Grumman Wins Contract to Maintain KC-10A Fleet

USAF KC-10A (48240/411) 86-0027 of the 605th AGS McGuire AFB. (photo by Fred Seggie)

Northrop Grumman Corp, the third- largest U.S. defense company, beat incumbent Boeing Co. for a $3.8 billion U.S. military contract to maintain the Air Force’s KC-10 aerial refueling tanker fleet.

The contract to service the fleet’s 59 tankers is for nine years, said David Apt, a spokesman for Northrop’s technical services unit. The KC-10, a modified Boeing DC-10, entered service in 1981, according to the Air Force.

Boeing, which is also competing against Northrop to build the next generation of KC-135 tankers, is disappointed by the award and will review the Pentagon’s decision to decide the company’s next steps, Forrest S.Gossett, a spokesman, said in an e-mailed statement. “We presented a competitive proposal that leveraged Boeing’s tremendous experience from over 80 years of
building and maintaining tankers,” he said.

Northrop’s responsibilities under the contract include maintenance and engineering support for the fleet. Its partners include AAR Corp. of Wood Dale, Illinois, and Timco Aviation Services Inc. of Greensboro, North Carolina. The Defense Department took about two years to award the contract, Apt said. “It was a very detailed procurement,” he said in a telephone interview.

Boeing, the second-biggest defense contractor, said in August that it agreed to pay the U.S. $25 million to resolve allegations that the company performed defective work on KC-10s. The government lawsuit had alleged that the Chicago-based company’s installation of insulation blanket kits in the planes was defective and that Boeing overcharged the government for the work, the Justice Department said.

Boeing’s Gossett declined to comment on whether today’s award to Northrop was related to the blanket-kit allegations, saying the company first needs to review the Air Force’s decision.

KC-135 Replacement Competition

Northrop and Boeing last week received the new draft request for proposals to build the next-generation of aircraft to replace the KC-135 fleet of aerial refueling tankers. Northrop and partner European Aeronautic, Defence & Space Co. won a 2008 contest for the work, only to have the award overturned when Boeing appealed. The Pentagon will replace the KC-135 fleet before the KC-10 program, Apt said.

(Will Daley and Susanna Ray - Bloomberg.com)