Boeing tanker protest seen facing high hurdles

By Bill Rigby

NEW YORK, March 11 (Reuters) - Boeing Co's (BA.N: Quote, Profile, Research) decision to protest the U.S. Air Force's decision to award a $35 billion refueling tanker program to rival Northrop Grumman Corp (NOC.N: Quote, Profile, Research) and Europe's EADS (EAD.PA: Quote, Profile, Research) was widely expected, but experts say it will be difficult to win.

Challenges by losing bidders on Pentagon contracts have become the norm in the past few years, as big defense jobs become fewer and further between, but industry analysts doubt that Boeing's attempt will yield results.

"It's a long shot," said Paul Nisbet at aerospace specialists JSA Research. "They (Boeing) more or less have to prove Department of Defense procedures were not followed or U.S. law was broken somewhere. These are not easy things to prove."

Full details of the Air Force's reasons behind its Feb. 29 decision to pick the Northrop/EADS team have not been made public.

The Pentagon's top arms buyer, John Young, told reporters on Tuesday there were "substantial capability and cost differences" between the Boeing and Northrop/EADS proposals.

"There's no question the Air Force can provide an abundance of facts and analysis for the decision they made," he said after testifying to a House Armed Services subcommittee.

But Boeing said on Monday it found "serious flaws in the process" that warranted an appeal, adding it will provide details on Tuesday.

"The protest should come as no surprise given the significance of the program to Boeing's long-term defense franchise," said Oppenheimer & Co analyst Myles Walton, in a research note.