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Pentagon Sees No Effect on Boeing, EADS on Bid ‘Error’

Nov. 22 (Bloomberg) -- Boeing Co. and European Aeronautic, Defence & Space Co. shouldn’t see any significant fallout from a “clerical error” releasing some data on their bids for a $35 billion aerial tanker program, the U.S. Defense Department said.

The Pentagon agrees with the Air Force’s initial assessment that the unintended sharing of some of the rivals’ information won’t affect the selection of a winner for the new refueling aircraft, Colonel David Lapan, a spokesman, said today in an interview.

The Air Force disclosed late Nov. 19 that the service mistakenly provided Chicago-based Boeing and EADS with “a limited amount” of data on the offers that are now under government review. The winning bidder probably will be announced in January, the Air Force has said.

“The department does believe that it was a ‘clerical’ error,” Lapan said. “We are certainly concerned with it, and the Air Force is looking into it, but we don’t believe there will be a significant impact.”

Deputy Defense Secretary William Lynn and Undersecretary for Acquisition Ashton Carter, the Pentagon’s top weapons buyer, have been briefed on the mistake, Lapan said.

U.S. Defense Secretary Robert Gates in September 2009 restored the Air Force’s ability to manage the new competition for tankers after taking away the service’s authority in 2008.

Boeing and EADS, which has headquarters in Paris and Munich, are vying for a contract to replace 179 of the Pentagon’s fleet of more than 500 KC-135 tankers. Those jets are pivotal because the U.S. military depends on inflight refueling to extend the range of combat and transport planes.

The Air Force responded “promptly” to its mistake with the bid data, Sean O’Keefe, chief executive officer for EADS’s North American operations, told reporters today in Washington. “It was clear it was an inadvertent release,” O’Keefe said.

The service asked last week for additional information from EADS and Boeing, so “this process doesn’t look like it is shutting down any time soon,” O’Keefe said. “They are refining their assessments.”

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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