The sentiment was shared by Senator Pat Roberts. "If this decision holds, it will be at the cost of American jobs and American dollars, if not our national security." Both called for meetings with Secretary of Defense Robert Gates immediately.
The Air Force and Pentagon were quick to rebuff claims the plane would be foreign. "This is an American tanker. It's flown by American airmen. It has a big American flag on the tail and everyday it will be out there saving American lives," insisted Gen. Arthur J. Lichte at a news conference.
Parts for the plane will come from all over the world but will be assembled at a yet-to-be built facility in Mobile, Alabama. The Air Force hopes to take possession of 15 planes a year over the next decade with the first plane entering service in 2013.
Boeing will likely ask for a review of the decision in hopes of reversing it. Here's how that would work:
- Boeing would file a formal protest with the Government Accountability Office or GAO.
- THe GAO would then review the protest to determine if the contact award was fair.
- Based on findings, the GAO then denies the protest or upholds all or a portion of the protest. Depending on what those findings are, the GAO would instruct the Air Force to take specific actions. Such actions could include requiring the Air Force to re-bid the tanker contract.
There's no word from Boeing if they plan to file a protest. The company says they are waiting to be debriefed on the decision by the Air Force.
Boeing says the contract would have created 3,800 jobs in Kansas and 44,000 nationwide. About 500 of those would have been in Wichita. The Pentagon's Defense Acquisition Board, which made the decision, says the economic impact of each offer was not part of the criteria they considered.
A Boeing spokesman says as a result of the decision, the company will phase out its 767 airplane in 2012 when orders run out.
The first 767 entered service back in 1981 and the tanker contract was seen as critical in keeping production going. The civilian version would have served as a platform for the Boeing tanker. The plane is built at Boeing's Everett, Washington facility.
The decision has been years in the making. Boeing received the original KC-135 replacement contract in 2001. Soon after, questions surfaced about whether Boeing received preferential treatment from the Air Force in getting the deal.
Arizona Senator and likely-Republican presidential nominee John Mccain argued the deal would be unfair the the American taxpayer and that it lacked independent oversight. The contract was put on hold two years later after lawmakers learned an Air Force official working on the deal had met with Boeing about a job at the same time she was negotiating the contract.
The scandal led to the depature of Boeing CEO Phil Condit and the resignation of James Roche, then secretary of the Air Force. Two other Boeing executives served time in prison and an Air Force acquisition officer who was working on the program killed himself.
Secretary of Defense Donald Rumsfeld officially cancelled the order in 2006. Boeing was allowed to re-apply for the contract but this time it had competition from Northrop Grumman and EADS.
The Pentagon says the past scandal had nothing to do with this week's decision, although many Boeing workers think otherwise.
There is still a chance Boeing could win a future tanker contract with the Air Force. That's because the Department of Defense plans to replace all 530 of its existing tankers. However, the next contract won't be up for grabs for several years.
Industry insiders say Boeing will likely take a short-term hit because of the decision. The say the $40 billion spread over 10 years is tiny compared to the $60 billion Boeing gets in orders each year.
Boeing is set to deliver the first 787 Dreamliner early next year after several delays. Boeing recently completed stress tests on the fuselage. The first test flight is expected to happen in the next few months.
Northrop Grumman stock rose $4.19, or 5.3 percent in after-hours trading on Wall Street on Friday. Boeing shares fell $2.69, or 3.2 percent.