WASHINGTON (AP) – The Pentagon opened a second round of bidding Wednesday for a $35 billion Air Force tanker contract following an error-plagued first attempt that featured bitter competition between Northrop Grumman Corp. and Boeing Co.

A revised draft request for proposals has been issued to build 179 new aerial refueling tankers meant to replace the Air Force’s current fleet that date back to the 1950s.

The Pentagon planned a briefing Wednesday afternoon to discuss the new selection process. The final version of the request for proposals is expected to be released to both companies on Aug. 15. The new bids are due Oct. 1 and a decision is expected by the end of the year.

The team of Northrop and Airbus parent European Aeronautic Defence and Space Co. won the original contract, but Boeing protested, saying the Air Force did not conduct the process fairly. A Government Accountability Office review found “significant errors” in the Air Force’s decision, and Defense Secretary Robert Gates later said he would reopen bidding.

Two Connecticut companies stand to benefit if Boeing gets the contract. Pratt & Whitney in East Hartford would build the engines and Hamilton Sundstrand in Windsor Locks would work on the electrical systems.

The new round will be limited to the eight issues where government auditors found problems with the initial process. Both companies have indicated their bids will be similar to their original plane designs.

A key focus likely will be some of the guidelines the draft request for proposals sets out for the plane’s design. For example, Northrop’s version was larger than Boeing’s and the GAO concluded the Air Force unfairly gave Northrop extra credit for that even though there were no size requirements for the aircraft.

Changes in the draft request for proposals include extra credit for exceeding the government’s threshold for the amount fuel that can be used for refilling other aircraft.

The revised draft “clearly favors the larger aircraft,” said George Behan, a spokesman for Boeing supporter Rep. Norm Dicks, D-Wash.

Pentagon acquisition chief John Young will lead the new contract award process after Gates took control away from the Air Force.

Jim McAleese, a defense industry consultant in Virginia, said Young has indicated he will take a close look at issues including how performance capabilities of the two planes should be ranked and the cost of the plane over its life cycle. While not forecasting a winner, McAleese said the extra scrutiny could help Boeing’s chances.

“The good news for Boeing is that it is a genuine opportunity,” McAleese said.

The struggle between the companies, two of the nation’s biggest military suppliers, has been particularly acrimonious. The two have sniped at each other through public relations campaigns that included full-page newspaper ads, Internet spots and sharp words from company executives.

Boeing and its supporters on Capitol Hill, especially those from Washington state where the company’s major airplane manufacturing base is located, have charged that the Northrop partnership with a European company will siphon jobs away from the U.S. as the nation’s economy is swooning. But Northrop officials say they plan to do much of the work at a new plant in Alabama that would provide up to 1,500 jobs.

Aerospace analyst Richard Aboulafia of the Teal Group said congressional involvement on behalf of both contractors could complicate efforts to pick a new winner. That includes lawmakers pressuring the Pentagon to take into account the jobs each program would create instead of just choosing the better plane.

“At this point it is a fair bet that politicians are going to start meddling in the selection process,” he said.

Spokesmen for both Northrop and Boeing said Wednesday morning they had received the draft request for proposals but had not yet seen a copy.

Shares of Los Angeles-based Northrop added 87 cents to $68.19 in afternoon trading, while Chicago-based Boeing’s stock rose 65 cents to $65.45.

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AP Business Writer Donna Borak contributed to this report.

AP-ES-08-06-08 1441EDT


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