McCain questions Pentagon tanker competition rules

By Andrea Shalal-Esa

WASHINGTON (Reuters) - U.S. Senator John McCain, whose investigation helped derail an earlier $23.5 billion Air Force plan to lease and buy 100 Boeing Co tankers, has raised serious concerns about the Pentagon's latest attempt to replace its aging fleet of KC-135 refueling aircraft.

In a letter to Defense Secretary Robert Gates dated October 29, McCain asked a series of detailed questions about how bids for the program would be evaluated, how decisions were made about requirements for the new airplanes, and whether the new rules would favor mostly smaller airplanes.

A copy of the letter was obtained by Reuters.

Northrop Grumman Corp and its European partner, Airbus parent EADS, won the last competition with their larger A330-based tanker, beating out the smaller 767-based tanker offered by Boeing.

Northrop has complained that the draft rules for the next competition, released by the Air Force in late September, are give Boeing and its smaller plane an unfair advantage.

Boeing and its supporters, meanwhile, question why the Air Force has decided to disregard a preliminary World Trade Organization ruling that found that Airbus benefited from

billions of dollars of illegal subsidies.

Boeing supporters argue the subsidies give Northrop and EADS an unfair cost advantage in the U.S. competition.