Under the hood on the tanker decision

In case you’d missed it, the Air Force  announced Friday that it will Northrop Grumman and EADS a $35-$40 billion contract to build aerial refueling tankers instead of Boeing.

It was a major upset, but apparently the contest wasn’t even close.

In this revealing research note, the Lexington Institute’s Loren Thompson, a defense analyst noted for his close ties to the Pentagon, breaks down weapons-buyers’ thinking on the five categories they judged the tankers on. In four out of five areas, Northrop/EADs won. Even the one Boeing tied - “proposal risk” - came at a price, as Boeing had to stretch out its schedule to reduce risk, but that forced it to increase the cost of the plane.

Boeing has said little publicly since the news came late Friday, but some analysts, including Thompson, say the tanker decision represented a fundamental miscalculation by the company of what the Air Force wanted in a tanker.

Meanwhile, the fallout continues.

Monday morning, Boeing’s stock was down almost 4 percent. Congressional leaders from Washington state to Kansas to St. Louis are calling for a probe. And labor leaders have a conference call scheduled for later today to blast “the Air Force’s misguided decision to outsource 44,000 U.S. jobs to a tainted foreign corporation.”

This likely isn’t over yet. So stay tuned.