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FACTBOX-Highlights of Pentagon's aerial tanker criteria

Published 09/24/2009, 04:35 PM
Updated 09/24/2009, 04:39 PM
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Sept 24 (Reuters) - The Pentagon announced new criteria on Thursday for how it would buy 179 refueling planes, telling lawmakers in a document obtained by Reuters that the rules did not favor one defense contractor over another. [ID:nN24469904]

Boeing Co , the second largest U.S. defense contractor, is vying for the contract against a team made up of Northrop Grumman and Airbus parent EADS .

The Pentagon's new rules:

* Set 373 mandatory requirements, down from over 800 in the last competition.

* Allow bidders to enhance their proposals by meeting 93 additional non-mandatory requirements.

* Require bidders to ensure their aircraft are ready to go to war on day one.

* Use the highest score in non-mandatory areas to decide the winning proposal, if the adjusted prices are within one percent of each on price.

* Adjust the prices offered by companies according to a model that evaluates "wartime effectiveness" of different sized aircraft under various war scenarios.

* Adjust prices for fuel burn and any military construction costs linked to the new airplane.

* Require delivery of first production aircraft in 2015.

* Require first tankers to start military operations in 2017.

* Set a three-phase approach to replace the existing fleet of 415 KC-135 and larger KC-10 military refueling planes.

* Require fixed price offers for development, procurement and initial contractor support.

* Require a best value -- not lowest price -- approach in choosing the winning proposal.

* Hold companies accountable for promised prices and performance, with price adjustments if they do not meet their promised parameters. (Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)

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