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A $40 Billion Tanker Battle

Boeing and Northrop Grumman are vying for a Pentagon contract to supply 179 new refueling tankers for the U.S. Air Force

It's a classic dogfight. On one side, cruising at a good clip, flies Boeing (BA), the U.S.'s second-largest defense contractor with some $66 billion in total sales. Ready to attack is $32 billion Northrop Grumman (NOC), the No. 3 contractor. It has allied itself with European Aeronautic Defence & Space (EADS), Boeing's archrival in commercial and military aircraft. At stake is a $40 billion contract to supply the U.S. Air Force with 179 new refueling tankers.

With the nation's Bush-era defense buildup in its waning years, the contract could be one of the last major aircraft acquisitions for some time. The Pentagon's Defense Acquisition Board met on the afternoon of Feb. 25 and was predicted to pick a winner as early as Feb. 26. A spokesperson for the Air Force said the branch had no further information or comment.