In an embarrassing about-face, US Defense Secretary Robert Gates said Northrop Grumman and rival Boeing would be asked to submit revised bids for the tanker contract to a new Defense Department team.

"We believe that we can complete all of this and award a contract by December," Gates told a Pentagon briefing, adding that reopening the competition would not "represent a return to the first step of a process that already has gone on far too long."

The move comes after the US Government Accountability Office (GAO) last month backed a protest by Boeing that it had lost the deal to Northrop and European giant EADS in a flawed process.

The GAO found "a number of significant errors that could have affected the outcome of what was a close competition."

Gates said the Pentagon would address those errors in the new process, adding "we will request revised proposals from industry."

In an implicit rebuke to the air force, Gates also shifted responsibility for picking a winner from the air force to the Pentagon's undersecretary of defense for acquisitions, John Young.

"Industry, Congress and American people all must have confidence in the integrity of this acquisition process," he said.

Although members of Congress generally voiced support for the move, Senator Maria Cantwell of Washington, a strong Boeing supporter, called for "a real rebid, not a rehash" of the old contract.

The new process could wrest the mega-contract from Northrop and its European partner EADS in a battle fraught with protectionist overtones.

The 179 new aircraft are to replace the air force's fleet of aging tankers made by Boeing, up to now the sole supplier of air refueling planes to the US military.

The contract is for the initial phase of a fleet replacement project worth some 100 billion dollars over the next 30 years.

Northrop Grumman said in a statement it wanted to make sure the bidding remains fair.

"We are reviewing the decision to ensure the re-competition will provide both companies a fair opportunity to present the strengths of their proposals," said Randy Belote, a Northrop Grumman vice president.

Boeing said it welcomed the decision but added that any modifications to the request for proposals "may include changes that significantly alter the selection criteria."

"We look forward to working with the new acquisition team as it reopens the competition, but we will also take time to understand the updated solicitation to determine the right path forward for the company," a Boeing statement said.

Louis Gallois, chief executive of the European Aeronautic Defence and Space Company, said the company would "fully support our partner Northrop Grumman in rapidly addressing our customer's requirements."

The GAO said the air force conducted "misleading" discussions with Boeing about its compliance with requirements and gave too much slack to Northrop Grumman on some points.

It also said the air force made "unreasonable" cost calculations that, when corrected, made Boeing the lower bidder over the life of the contract.

Acting Air Force Secretary Michael Donley said "the most direct route" to fielding a new tanker was to revise the terms of the bid offer and reopen the competition.

But Young told reporters that Northrop and Boeing "can totally change their proposal."

"And that would include features of what they originally proposed or features that are a totally new product, if you will," he said.

In choosing Northrop Grumman in February, the air force said it did so in part because its KC-45 aircraft, a militarized version of Airbus' 330, was larger and could carry more fuel than Boeing's KC-767, a modified version of the Boeing 767.

The GAO report marked a new twist in a process that in 2003 saw Boeing awarded the contract, only to have it canceled in a procurement fraud scandal.

The choice of EADS raised protectionist hackles in Congress, with lawmakers citing security concerns and job losses to Europe at a time when the US economy is struggling.

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