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Congress likely to examine Air Force tanker decision

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A Pentagon decision to award a $40-billion tanker contract to Northrop Grumman Corp. and European partner Airbus drew a flurry of outcries from lawmakers and presidential candidates Monday as the contract appeared headed for a protracted battle in Congress.

House Speaker Nancy Pelosi said she had "serious questions" about the decision and vowed to have Congress review the contract thoroughly, but stopped short of calling for congressional hearings.

"What are the national security implications of using an aircraft supplied by a foreign firm for this essential mission?" Pelosi said. "Given the ramifications of this decision for the U.S., the Air Force must explain to Congress how it meets the long-term needs of our military and the American people."

In a stunning move, the Air Force selected the Northrop-Airbus team Friday over Chicago-based Boeing Co. to build 179 planes to replace KC-135s that have been in use since the late 1950s for the in-flight refueling of fighters, bombers and transports.

Northrop's headquarters is in Century City, while Airbus, a subsidiary of European Aeronautic Defense and Space Co., is based in Toulouse, France. The new tanker, to be called the KC-45A, is based on a French design. It will be assembled in Mobile, Ala.

The Pentagon is expected to brief the companies soon on how it reached its decision.

The contract has set off a political firestorm, particularly among "Made in America" proponents, labor unions, presidential candidates and lawmakers from Washington state and Kansas, where Boeing had planned to built its tankers.

The two leading Democratic presidential contenders criticized the Pentagon for relying on a foreign business for important military equipment.

Sen. Barack Obama of Illinois said Monday that it was hard for him to believe "that having an American company that has been a traditional source of aeronautic excellence would not have done this job."

Sen. Hillary Rodham Clinton of New York said she was "deeply concerned about the Bush administration's decision to outsource the production of refueling tankers for the American military."

"It is troubling that the Bush administration would award the second-largest Pentagon contract in our nation's history to a team that includes a European firm that our government is simultaneously suing" at the World Trade Organization for allegedly receiving illegal subsidies, Clinton said.

The leading GOP presidential contender, Sen. John McCain of Arizona, whose congressional inquiry led to the cancellation of the initial tanker contract with Boeing and the follow-up competition that Northrop won, said he would wait to review the decision before commenting.

Lawmakers from Alabama countered on Capitol Hill saying that the decision would create thousands of jobs in the U.S. "Any assertion that this award outsources jobs to France is simply false," said Sen. Richard Shelby (R-Ala.).

Meanwhile, a defense policy analyst who has close Pentagon ties said Monday that the Northrop-Airbus proposal to modify Airbus' A330 passenger jet into a tanker beat Boeing's bid in four out of five major criteria set by the Air Force, including performance on past Pentagon contracts and the tanker's capability.

The companies deadlocked on the potential risk that the tankers would be completed on time and at cost.

"Boeing didn't manage to beat Northrop in a single measure of merit," Loren Thompson, an analyst with the Lexington Institute, said in a report. The Northrop-Airbus "offering was deemed much better in virtually all regards."

The tanker decision was announced Friday after markets closed. Northrop shares rose $3.96 on Monday to $82.57. Boeing shares fell $2.12 to $80.67.

peter.pae@latimes.com

Times wire services were used in compiling this report.

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