When the contest to select a replacement for the US Air Force’s aging fleet of air refuelling tankers was launched for the third time at the end of September, Pentagon officials pledged that it would be a model example.

Just over a month later those commitments are looking decidedly shaky. One of the bidders has raised the possibility of legal action against the USAF, while in Washington DC a proxy battle is being waged by lawmakers backing the rival teams.

Disputes are par for the course in a saga that has dragged on for almost a decade. In the last contest in 2008, an Airbus and Northrop-Grumman team unexpectedly won – only for Boeing to successfully challenge the process, leading to accusations of US protectionism.

With defence budgets under pressure and commercial aerospace in recession, analysts say the contract is crucial to both teams.

The deal to supply an initial 179 aircraft could be worth up to $50bn, while follow-on deals could bring the total to more than $100bn.

US procurement authorities are also under enormous pressure to create a competition that is free of controversy this time round, after two previous attempts collapsed amid ethics scandals and legal challenges.

In its determination to create a bulletproof process, the Pentagon may have caused itself more headaches. In the last contest the USAF set 37 mandatory requirements and was able to use its best judgment to decide which capabilities were most important.

This time round those subjective elements have been removed. There are now 373 mandatory requirements graded on a simple pass-fail basis. The rules are so tightly specified that the water flow in the toilets is scored as highly as the fuel offload rate.

Once the key requirements are met, and certain adjustments are made, price will determine the contest. Only in the unlikely event that bids are within 1 per cent of each other will the USAF consider any additional advantages of an aircraft.

Northrop executives claim that the net effect of the changes is to disadvantage their larger, “more capable” aircraft, because a tanker with fewer “bonus features” has fewer extra costs, and is therefore more likely to win.

“This really is tantamount to a cost shoot-out which incentivises a ‘race to the bottom’ in terms of capability,” said Mitch Waldman, a vice-president at Northrop, at a recent press conference.

To make matters worse, Northrop complains that the USAF unfairly gave Boeing access to its previous bid proposal but did not hand over reciprocal information. A spokesman says it is considering a number of options including legal action.

Northrop executives are also highly critical of the USAF’s decision to remove any detailed assessment of project risk and to accept a much slower timetable for the programme – changes, it claims, that help Boeing.

Behind Northrop’s anger is a sense that it is the wronged party, having won the previous contest only for Boeing to protest.

As a result, the team is pressing for the USAF to rerun the last competition with the minimal required changes.

Congressional supporters have been less tactful. In late October, Richard Shelby, senator for Alabama – a state that would benefit should Northrop win – said the USAF was “tilting the process” so Boeing would prevail. “I think it’s a sham process at the moment,” he said.

For its part, Boeing is keeping a relatively low profile. “While our opponent and their supporters have begun attacking the US Air Force and [contest], we have chosen to work within the process,” a spokesman says.

The company says that in August 2008, the government released “consistent [tanker contest] pricing information to both sides … and has already handed over a comparative amount of Boeing’s pricing data from the previous competition.”

Data is unlikely to settle the matter, however, says Scott Hamilton, an aviation industry consultant.

“This is not a contest about technical merits but about Boeing versus Airbus, America versus France … and Boeing has the stronger political backers.”

Indeed, political supporters from Boeing’s home states have been notably vocal on its behalf. Last week 40 lawmakers wrote to President Barack Obama urging him to ensure the tanker contest penalised Airbus for what they claim are breaches of international rules on trade subsidies.

To create a “level playing field” the letter said, the price formula “must reflect in some way the amount of illegal subsidies that aided the development of the Airbus airframe and may thereby allow EADS, Airbus’s parent company, to submit a reduced price bid.”

For the USAF, the complaints are frustrating.

“This is a tough project. We don’t need all of the … complicating elements that are added to that when people try to develop campaigns in favour of their programme,” said Michael Donley, Air Force secretary, recently.

But they are clearly having some effect. Although Mr Donley said that the main outlines of the contest were put together well, he added that “I would imagine that we are going to consider some change to the [contest rules].”

The USAF is currently considering comments on the draft bid rules and will produce a final set of requirements some time later this month before selecting a contract winner in June.

Still, whoever wins the contest could be in for some challenging times.

In another unusual move for a development contract, the air force is looking for an 18-year, fixed-price contract. Historically such deals have been expensive for everyone involved.

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