Air Force Contract Appeal Rejected

The U.S. Government Accountability Office (GAO) rejected an appeal from the U.S. Air Force regarding a $1.2 billion aircraft maintenance contract awarded to the Boeing Co., a move that keeps alive a rival bid from Birmingham-based Alabama Aircraft Industries Inc. The ruling by GAO means that the Air Force must review and explain its selection criteria. The 10-year contract covers maintenance and repair work on the Air Force's fleet of KC-135 aerial refueling tankers. The ruling is the latest setback for the Air Force as it nears a decision in another high-stakes competition involving Boeing. The Air Force is evaluating bids from Boeing and Northrop Grumman Corp. on a $40 billion deal to begin replacing its aging fleet of KC-135s.