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Defense Secretary Gates makes major move on tanker contract

The years-old fight between Northrop Grumman/EADS and Boeing to supply the Air Force with a new fleet of refueling tankers had a pretty significant development this morning.
Since Defense Secretary Robert Gates reopened the bidding due to a Boeing protest after Northrup Grumman had originally won it, his office had total oversight over the rebidding process. That is no longer the case, or as much of the case as it used to be (if that makes sense).
Gates has restored to the Air Force the control over the process it enjoyed before the Boeing flare-up. Gates did say in a speech at the Air Force Association trade show that his office will continue to closely monitor things.
This probably doesn’t provide any sort of advantage to either company as the rebidding moves forward. Northrop Grumman’s victory was greeted with a lot of high-fives in Mississippi, specifically on the Gulf Coast. Northrop Grumman plans to build the KC-45 Tanker in Mobile, which could spin off suppliers and supplier jobs — not to mention direct jobs — to the area. Over the life of the contract, the deal could exceed $100 billion.
George Freeland, the executive director of the Jackson County Development Foundation, couldn’t overstate its potential during a conversation with Magnolia Marketplace a couple months ago.
The details of Gates’ speech can be found here.

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