EADS: Mission 'Impossible'

By Jason Sherman / March 18, 2010 at 5:00 AM

The Pentagon's current deadline for Air Force tanker bids does not permit enough time for EADS, the European defense contractor, to find a new U.S. partner and prepare a new proposal for an aerial refueling aircraft, Louis Gallois, EADS' chief executive officer, told reporters in New York this morning.

“It is impossible,” Gallois said. “The present time frame -- 60 days -- impossible.”

Asked if any other major U.S. defense contractors have approached EADS to discuss partnering for the tanker competition, which EADS won in 2008 when teamed with Northrop Grumman, he said, “For the time being, no.” The Pentagon overturned the award to the Northrop Grumman-EADS team after congressional auditors determined DOD's evaluation criteria for selecting the winner was flawed.

Gallois said he supported Northrop Grumman's decision last month to not compete again for the potential $35 billion deal to build 179 new tanker aircraft, citing a belief that the new request for proposals would favor a smaller aircraft built by Boeing.

Gallois said the entire process was “a huge frustration,” and that it has resulted in two "victims."

U.S. taxpayers, he said, are the “first victim” of a competition with only one bidder. “It is clear that when there is a competition there is pressure on price. When there is no competition, I think it is different.”

The second victim is the Air Force, he said. "The U.S. Air Force will not have the most modern and capable airplane. And it will be the first time that the British, the Australians will have a better airplane than the Americans.”

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