EADS Will Make Solo Bid For Tanker

4:07 p.m.

Governor Bob Riley
“I hope this time the president and the Pentagon will understand we can’t allow procurement decisions to be made on a political basis. When the Pentagon rewrote the RFP, they rewrote it for a specific plane - a smaller, slower, cheaper plane. As long as we make sure the best airplane is selected, then I think EADS will win. I think Alabama will win and this aviation corridor that’s developing across the Southeast will be enhanced.”

Senator Jeff Sessions
“EADS’ bold decision to bid alone salvages (the) competition, and should be music to the ears of taxpayers and the men and women in uniform who will depend on this aircraft for decades to come. Compared to a sole-source deal that clearly undermines competition and would result in an inferior aircraft being provided to our war fighters, a true competition is far more likely to produce an aircraft with better capabilities at a lower price.

Although this contest appears to now have two participants, it will not be a true competition until it is conducted on a level playing field. Serious concerns still remain regarding the fairness of the Pentagon’s RFP, which was dramatically altered in ways that clearly favor one side over the other. I will continue to encourage senior Department of Defense officials to address those concerns. Ensuring that every aspect of the process is conducted properly will send a strong message that the Pentagon is serious about selecting the best aircraft for the military and the taxpayer.”

Congressman Jo Bonner
“Today's announcement by EADS is welcomed news to those of us who believe that competition is actually an American ideal.

The Pentagon will now have the competition that Congress mandated, and the Air Force will again have a choice between the newest, latest technology and something from a bygone era.

EADS and Mobile have already proven we can win a real head to head competition. Again, we stand ready to deliver the best tanker for the warfighter and the taxpayer.”

Mobile Mayor Sam Jones
“EADS believes in their product and in Mobile. Our city continues to see successes in economic development. We must remain strong and competitive so we can win this competition and continue to attract jobs to our city. We remain fully supportive in EADS efforts.”

Mobile County Commission President Merceria Ludgood
"The goal of building tankers and commercial aircraft in Mobile, and making the central Gulf Coast an aerospace center, remains attainable with today's news."

Mobile County Commissioner Mike Dean
"We're thrilled that EADS is going to bid but we must reiterate our concern that this competition be fair and transparent. If EADS gets a fair shot, it will win."

1:31 p.m.
Ralph Crosby, Chairman, EADS North America, announces EADS will submit a bid for the $40 billion tanker contract.

"When you've got the best, you've got to offer it," Crosby said.

Crosby says they're submitting a bid because EADS has the world's best tanker and "our aircraft exists."

12:36 p.m.
Airbus parent EADS (EAD.PA) is poised to bid alone for a U.S. refueling plane deal valued at up to $50 billion after failing to recruit L-3 Communications Holdings (LLL.N) or another major company as a key supplier, sources familiar with the matter said.

EADS will still be backed by a big team of suppliers in its challenge to Boeing Co (BA.N), including engine maker General Electric Co (GE.N), Honeywell International Inc (HON.N) and Rockwell Collins Inc (COL.N) to name a few, said the sources, who were not authorized to speak on the record.

But the team will not include -- at least for the time being -- a U.S. company that would have done some classified work on the A330-based tanker and helped to manage the huge program, the sources said.

"EADS will be on its own for now," one source familiar with the matter said, following weeks of debate triggered by the loss of its original partner Northrop Grumman Corp (NOC.N)

An announcement was expected this week, possibly as early as Tuesday, said the sources.

Guy Hicks, spokesman for EADS' U.S. arm, said the company continued to examine its options and declined further comment.

EADS, spurred by Pentagon officials to consider a solo bid, had talked with L-3 and other companies after Northrop withdrew from the politically-charged competition last month, arguing that revamped rules favored Boeing's smaller 767-based tanker.

EADS and Northrop, which had been the prime contractor, won the last tanker contract in February 2008, but the Pentagon canceled that deal after government auditors upheld a Boeing protest and faulted the Air Force's handling of the contest.

EADS has a separate U.S. unit that can do classified work on the program, but had hoped to find a large U.S. partner with security clearances and certifications for some of the detailed work involved, especially given the tight deadline for submitting its bid, the sources said.

But EADS was forced to rethink its plans when L-3 cooled on the deal, with at least one source suggesting that L-3 had come under political pressure to skip the deal.

Republican Senator Jeff Sessions on Monday accused Norm Dicks, a Democratic congressman from the big Boeing state of Washington, of trying to intimidate EADS' would-be partners.

"I am deeply disappointed that the Chairman of the House Defense Appropriations Subcommittee, Norm Dicks, would publicly engage in political intimidation to restrict competition on any contract," said Sessions, who comes from Alabama, the state where EADS would assemble the tankers if it wins the latest contract.

Dicks last week was reported as saying that he hoped U.S. firms would not team with EADS, although his spokesman said Dicks was merely questioning why other companies would see the business case differently than Northrop had.

Dicks and other Boeing supporters argue that the Pentagon should not extend the bid deadline for tankers given a recent World Trade Organization ruling that Airbus received unfair civil subsidies for its airplanes, including the A330.

Several sources said EADS remains in contact with all potential parties pending a bid.

"I would not rule out that they will get a partner at a later date, but at this point, they really needed to give the Pentagon and the world an indication of what their intentions are," said Scott Hamilton, aerospace analyst with Leeham Co.

The Pentagon has said it will extend the current May 10 deadline until July 9 if EADS agrees to enter the competition.

That gives EADS executives limited time to prepare its proposal, a document that could wind up being 20,000 to 30,000 pages, although Boeing has argued that even a 60-day extension is unnecessary.

Defense consultant Jim McAleese said EADS had little choice but to bid for the work. "The reality is that that there will not be another opportunity of this importance in the lifetimes of that management team," he said. "This is the biggest opportunity they will have."