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Air Force tanker bid thrown out for arriving 5 minutes late

By Larry Shaughnessy, CNN Pentagon Producer
The Air Force wants to replace its fleet of KC-135 tankers, which act as flying gas stations for warplanes.
The Air Force wants to replace its fleet of KC-135 tankers, which act as flying gas stations for warplanes.
  • Contact to build air refueling tankers is worth $30-40 billion
  • Ukrainian aircraft manufacturer's bid will not be accepted
  • Messenger gets to air base gate on time, but not to the office to deliver bid

Washington (CNN) -- What may be the most contentious Pentagon contract is the focus of yet another fight, with this round centered on whether a bid for a $35 billion contract should be thrown out because it arrived five minutes late.

For about a decade the Air Force has been trying to replace its fleet of KC-135 air refueling tankers, the big jets that act as flying gas stations for warplanes.

In the latest attempt, three companies wanted to submit bids to build the KC-X, the next generation of tankers; Boeing, EADS and US Aerospace.

Each company's bid was required to be submitted to an office at Wright-Patterson Air Force Base in Dayton, Ohio, by 2 p.m. July 9.

Boeing and EADS got their bids into the office with time to spare. US Aerospace said its bid arrived at Wright-Patterson half an hour before the deadline. The Defense Department said it was five minutes late.

US Aerospace is a new company that is in partnership with Antonov, a state-owned Ukrainian aircraft manufacturer that used to build planes for the Soviet Union's military and now specializes in building very large aircraft.

Because of the late arrival of the bid, the Defense Department will not consider US Aerospace's proposal, according to Pentagon chief spokesman Geoff Morrell.

"We are not allowed by law to even review their proposal. It did not arrive in time. So we cannot consider it. We cannot review it," Morrell said.

A spokesman for US Aerospace, Chuck Arnold, said the Defence Department "still feel[s] the cold war is on" and doesn't want US Aerospace to succeed in the bid.

Morrell said the rules are clear.

"This is a $30 billion to $40 billion contract. That is not a high school homework assignment, OK? These deadlines count, and any professional contractor understands that," he said.

Chuck Arnold, a spokesman for US Aerospace, said the bid proposal was on time.

"We have documented evidence that the messenger [who was carrying the bid] was there at 1:30." But Wright-Patterson is a huge facility and the company said the messenger was held up at the gate, then got lost driving to the building where the bid needed to be. When the messenger and the bid proposal finally arrived at the proper location, the bid was marked as having arrived at 2:05.

The company was told the bid would not be considered.

US Aerospace is fighting that decision and asking that its bid proposal, which it said will save U.S. taxpayers millions of dollars and produce a better tanker plane, be considered.

That might mean further delay in a process that began in 2002 and has been stopped and restarted twice. Morrell said he is confident that the dispute with US Aerospace will not slow the process again.

"Are we concerned about their protest that it might lead to a delay in the awarding of this contract? I don't believe so," Morrell said. "This is going on. We will -- we will award this contract in the fall, as we always said we would."