Pentagon delays $35B Air Force tanker decision

WASHINGTON (AP) -- The Defense Department is again delaying plans to award a 35-billion-dollar contract for Air Force refueling planes, leaving the politically charged decision for the next president.

Defense Secretary Robert Gates says the Pentagon's plan to pick a winner by the end of the year no longer seemed possible given the complexity of the project and the rancor between Boeing and rival Northrop Grumman. He said a delay would provide a "cooling off" period.

The decision represents a major win for Boeing in its lengthy and bitter struggle with Northrop for the lucrative contract for 179 planes that could eventually include the right to build many more. Boeing recently threatened to back out, saying the Pentagon's timeline and terms unfairly favored the larger plane proposed by Northrop. That would have left Northrop as the only bidder.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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