Pentagon calls 'do-over' on air tanker contract

The downside of globalization was on display Wednesday when the U.S. Defense Department announced it had reopened the bidding for a disputed $35 billion contract to build air tankers for the Air Force, the Associated Press reported. The contract had been awarded to the team of Northrup Grumman Corp. and European Aeronautic Defence and Space Co., the parent of Airbus, over a competing bid by Boeing Corp., the incumbent. But the award set off a storm of protest from U.S. lawmakers, who wanted the contract awarded to U.S.-based Boeing -- apparently whether it offered the best bid or not. Boeing protested the award to its biggest competitor, and the U.S. Government Accountability Office decided last month that the original contract contained "significant errors" and should be rebid. The GAO said Boeing might have won the contract had it not been for the errors. Defense Secretary Robert Gates said his office, not the Air Force, would oversee the rebidding process. The contract is one of the largest ever awarded by the Air Force, and is the first of three similar deals expected to be worth more than $100 billion to replace some 600 refueling air tankers.