EU queries US contract rules after EADS withdrawal

(BRUSSELS) - European trade chiefs on Tuesday queried tender rules for a 35-billion-dollar US Air Force aerial refuelling tanker plane contract after Europe's EADS pulled out of the race.

"The European Commission would be extremely concerned if it were to emerge that the terms of tender were such as to inhibit open competition for the contract," a statement from Brussels said.

US plane-maker Boeing is poised to win the contract after rival partners Northrop Grumman and EADS dropped out.

Northrop Grumman and EADS charged that the US Air Force's requirements for the KC-X tanker programme were skewed in favour of US rival Boeing.

"It is highly regrettable that a major potential supplier would feel unable to bid for a contract of this type," said European Union Trade Commissioner Karel de Gucht.

"Open procurement markets guarantee better competition and better value for money for the taxpayer."

The Northrop-EADS team had won the contract in February 2008, but the deal was cancelled after Boeing successfully appealed the decision to the Government Accountability Office, the investigative arm of Congress.

With the exit of Northrop and EADS, Boeing is in prime position to snare the contract to replace the 1950s-era aging fleet of Boeing tankers.

The Chicago-based firm had said it would submit its proposal by May 10, within the 75-day period set out in the Pentagon's request for proposals.

The EU statement underlined that the US defence trade balance with the EU has traditionally been "significantly in the US' favour," citing 2008 figures running to five billion dollars of US defence exports against only 2.2 billion dollars' worth of imports.

"The commission will be following further developments in this case very closely," Brussels warned.