Boeing may exceed aerial tanker cost ceiling by $500 Million

Does this surprise anyone?

Northrop Grumman pulls out of tanker deal

Boeing KC-767A

I love how the last paragraphs of the article allude to the most likely reason Northrop Grumman pulled out and Washington-based Boeing will win:

But with Northrop out of the competition, the Pentagon can now "move quickly to replace the Air Force’s aging fleet of KC-135 tankers," said Washington Democratic Rep. Norm Dicks, who is in line to replace the late Rep. John Murtha (D-Pa.) as head of the House Defense Appropriations Subcommittee.

“I applaud the Northrop Grumman Corp. for its assessment and its decision not to delay the procurement by submitting a bid and requiring the government to conduct another lengthy competition,” Dicks said.

Pentagon eyes accelerated "bunker buster" bomb; Q2 Earnings Reports

The Air Force will do anything to keep their share of the bloated defense budget, which is almost always the biggest piece of the pie because of R&D and weapons technology. First it was the F-35, F-22, new fuel tankers, and now they are focusing on a new "bunker buster" to counter the perceived threats from North Korea and Iran. Boeing, who posted a 17 percent Q2 profit primarily because revenue from the integrated defense systems unit rose 9 percent to $8.7 billion, is more than willing to get another big government contract and build as many "bunker buster" bombs we "need."

"The Air Force and Department of Defense are looking at the possibility of accelerating the program," he said. "There have been discussions with the four congressional committees with oversight responsibilities. No final decision has been made."

The precision-guided weapon, built by Boeing Co (BA.N), could become the biggest conventional bomb the United States has ever used.

Carrying more than 5,300 pounds of explosives. it would deliver more than 10 times the explosive power of its predecessor, the 2,000-pound BLU-109, according to the Pentagon's Defense Threat Reduction Agency, which has funded and managed the seed program.

Chicago-based Boeing, the Pentagon's No. 2 supplier by sales, could be put on contract within 72 hours to build the first MOP production models if Congress signs off, Bourland said.

Other defense industrial complex giants did not fare as well as Boeing did in the second quarter of 2009. Only Raytheon posted a profit. Northrop Grumman reported a Q2 profit decline, BAE posted a loss despite producing the MRAPs being used in CENTCOM today, Lockheed Martin reported a decline, and General Dynamics reported a loss.