Boeing Says It Might Exit Tanker Bidding

Boeing said it may pull out of the competition to win a $40 billion contract to build new, aerial refueling tankers for the Air Force unless the Pentagon agrees to give it more time to submit a new bid.

The prospect of a key bidder's departure from the competition is the latest twist in the Air Force's ill-fated effort to replace its aging tanker fleet. The Defense Department last month canceled its previous award of the tanker deal to Northrop Grumman and a foreign partner after a government oversight agency said the contract had been awarded unfairly.

Pentagon officials say they want to pick a new winner by year's end. To meet that deadline, defense industry analysts have said, the government is likely to give the competitors 45 to 60 days to turn in new proposals. The government is expected to put out a new request for proposals early next week.

Boeing spokesman Dan Beck said the company needs six months to put together a new bid because it thinks the Air Force has changed the requirements and is now asking for a plane that can carry more fuel. Beck said the four additional months are needed to do further price analysis and engineering work to propose a different plane.

If the Pentagon doesn't grant more time, Beck said "one of the options we would seriously consider is that we would possibly" not bid at all.