But Boeing blew that chance with a scandal that involved the company’s promise to a Pentagon procurement officer of an executive’s job at Boeing after her retirement from the federal government. That scandal killed a plan that would have leased 100 tankers from Boeing for $24 billion.

Now as the political and technical dogfight over what could be $100 billion in business continues into its third round, analysts and oddsmakers say Boeing’s chances of prevailing over an alliance of Northrop Grumman and Europe’s EADS are diminishing. In February, Northrup and EADS were awarded a $35 billion contract to construct the tankers.

Boeing was rescued from the loser column by the Government Accountability Office, which earlier this summer found irregularities in the competition for the initial contract for 179 new tankers and recommended a do-over.

Now Boeing and Northrop Grumman/EADS are again poised for a new competition, a competition that could theoretically lead to a new winner before the end of the year.

But Boeing is reportedly considering whether to drop out of the competition because the company sees that its own existing plane won’t meet the Air Force’s adjusted standards for the new tanker and because the company doesn’t have the time to revise its proposal.

Here are the issues weighing on Boeing’s mind:

The Pentagon’s new specifications

Boeing based its appeal of last February’s award to Northrop Grumman/EADS on the Air Force’s failure to follow its own competition rules. The service, for instance, gave the Northrop Grumman/EADS proposed tanker extra credit for its larger fuel capacity and its ability to carry more troops and more cargo than Boeing’s KC-767 tanker. Boeing argued successfully that the Air Force shouldn’t have given Northrop Grumman extra points for more capacity when Boeing’s own 767-based plane met or exceeded all Air Force capacity requirements. Now the Pentagon has amended those new draft specifications to give extra points to Northrop Grumman’s larger plane, which is based on the Airbus A330 commercial jet.

THE SHORT TIME FRAME

The Pentagon has released its draft specifications for the new competition, but has missed its own deadline of Aug. 15 to release the final standards for the plane. As of late last week, only the Pentagon knew when the final standards will be released, but the best guesses point to sometime this week.

Boeing Chairman Jim McNerney met last week with Pentagon officials to ask for more time for Boeing to prepare its reply. With amended standards, Boeing will have to field a larger contestant to match the Northrop Grumman/EADS plane’s capabilities. If Oct. 15 remains the deadline to submit the final proposal, Boeing will be stuck with a smaller plane that seems destined to fall short of the Airbus-derived tanker.

Boeing engineers will need at least six months if not more to field an alternate proposal.

Northrop Grumman says further delays will taint the competition.

“If one competitor decides it is now time to listen to their customer and fundamentally change their offer, that is their choice,” said the Boeing competitor, “but the war fighter and taxpayer should not have to bear the burden of their late-breaking change in business strategy.”

The PLANES AVAILABLE TO BOEING

Boeing may need a larger plane to compete if the new specifications remain in place. It has several choices.

The new 787 Dreamliner: Boeing could propose a version of its midsize 787, the company’s commercial replacement for the 767. But while the 787 would offer substantial advantages over the A330 in fuel efficiency and maintenance, Boeing doesn’t even have the first commercial version flying. Its production line has been plagued with delays because of parts shortages and supplier problems. And the company has an order backlog of nearly 900 commercial 787s to produce before it could consider building a tanker or freighter versions of the plane.

The 777: That plane would more than answer the Pentagon’s call for a larger plane. But the 777 is much larger than the A330, maybe too large. If Boeing is true to its own arguments that the A330 is too large for some remote airports and facilities, it would have to concede that its own arguments would have to apply to the 777. Two other problems with the 777: The plane enjoys a substantial commercial backlog. Boeing might not have the capacity to produce those and the tankers simultaneously. The 767 is nearing the end of its commercial life, and Boeing is building only one or so a month. Boeing is producing 777s at the rate of seven a month. Upping the production rate to include 14 767 tankers a year would not put a strain on the 767 line.

The 767-400: The largest commercial version of the 767 was a limited commercial success against the A330. The 767-400 was an elongated version of the 767-300. Its length could compromise its short-field takeoff abilities because a longer plane must rotate upward at a shallower angle at takeoff to prevent it from striking its tail on the runway. That takeoff angle would be even milder with the tanker that sports a refueling boom pivoting downward from the aft end of the aircraft. Even if the 767-400 tanker were built, its capacity would still fall somewhat short of the A330.

The COMPANY’S

TRACK RECORD

Boeing sees its record of producing more than 600 tankers for the Air Force as a positive in the competition, but its rival points out that most of that experience was more than three decades ago. More recent experience building 767 tankers for the Italian and Japanese air forces has been fraught with delays.

Of course, Airbus has had its own problems with commercial delays on its superjumbo A380, multiple delays on its A400 airlifter and schedule problems with tankers it’s building for Australia.

But for all the negatives, Boeing must consider the positives in continuing to pursue the deal.

The PRIZE

The initial contract calls for producing some 179 tankers at a price estimated to be about $35 billion. But that’s only the first batch of tankers the Air Force many need. The service currently has more than 400 aging tankers in service with an average age of 47 years. Other countries are sure to follow the U.S. example in ordering tankers of their own.

Israel, for example, needs more tankers to reach distant potential Mideast targets. It is modifying older Boeing 707s to augment its fleet. But that’s only a stopgap measure. Great Britain, Australia, Saudi Arabia and the United Arab Emirates have ordered A330-based tankers. Japan and Italy have ordered tankers based on the 767.

The ultimate prize could be as much as $100 million for the winner. Winning the tanker deal would prolong the life of the 767 assembly line in Everett by years and balance out production between the military and commercial sides of the company.

The POLITICS

Boeing has gathered up an alliance of politicians eager to help it win new business. Those politicians come largely from states such as Washington, Kansas, Missouri and Pennsylvania where Boeing employs thousands of workers. Boeing’s alliance is predominately a blue-state coalition. Rep. John Murtha, D-Pa., chairman of the House Defense Appropriations Subcommittee, has already drafted legislation that would block spending on the tanker if the specifications are changed from the original. And Washington Sen. Patty Murray said she’s keeping a wary eye out for changes in the Pentagon’s specifications that could torpedo Boeing’s proposal.

“I have followed the bouncing ball for eight years, and the ball is still bouncing,” she said. “I am going to stay in the Pentagon’s face.”

U.S. Rep. Norm Dicks, D-Belfair, is ready to take whatever action is necessary to see the Boeing bid succeed, said his press secretary George Behan.

“Right now we’re just waiting to see what the Pentagon will do. Norm is ready to applaud if they stick to the original plan or to raise hell if they don’t,” he said.

Northrop Grumman/EADS has its own political swat team concentrated in the South where the company plans to build a final assembly plant in Mobile. Ala.

If the Democrats take the White House and increase their strength in Congress, Boeing’s standing may improve. If John McCain wins the presidency, the situation may be different. It was McCain who derailed Boeing’s 2002 deal because he objected to the lease arrangement. Some of McCain’s supporters have been Northrop Grumman lobbyists, but the candidate says he’s neutral.

The 767

If Boeing can keep the specifications frozen, it believes that it has a good chance of prevailing.

“The Boeing KC-767 exceeded the requirements in a manner that still kept the plane right-sized and efficient,” said Boeing tanker programs vice president Mark McGraw. “Our competition likes to talk about offering more, more, more, but in reality the KC-30 (the Northrop Grumman/EADS plane) will cost more to operate, more to maintain and more to house with the U.S. taxpayer footing the bill.”

The Air Force will save $30 billion in fuel costs, $19 billion in maintenance and infrastructure costs by picking its plane over Northrop Grumman’s, Boeing claims. The plane can use smaller airfields closer to the combat zone, the company says.

Northrop Grumman says its plane can refuel more aircraft in a single flight, has more range and can do more double duty by carrying 226 troops to the battlefield as well as tons more cargo than the 767. Boeing says the Air Force asked for a tanker, not a cargo plane.

The Air Force moved less than 1 percent of its cargo and passengers in tankers in 2006, Boeing says.

On a typical battleground scenario, even today’s smaller tankers don’t discharge 100 percent of their extra fuel, so the A330’s extra capacity will be seldom used, Boeing claims.

The WORK FORCE

Boeing’s Everett work force has built passenger versions of the 767 for 25 years. Most of Northrop Grumman’s Mobile work force will be building their first plane in a new plant.

The FLAG

Boeing says its plane is more American than Northrop Grumman’s. Northrop Grumann said 60 percent of its plane’s contents are American made including its engines. Boeing sources parts from such countries as Japan and Italy. Boeing says the 767 will create or sustain 44,000 American jobs. Northrop Grumman/EADS first claimed 25,000 American jobs for its tanker. Now it says its tanker will create directly or indirectly 48,000 U.S. jobs despite its European origins.

Some analysts believe Boeing simply has too much at stake to drop out of the bidding.

“We think it unlikely Boeing will simply decide to no-bid in round three, having come this far and undertaken all the risk associated with round two and the reported ill will it will generate in the Air Force and the Department of Defense as a result,” said Issaquah aerospace analyst Scott Hamilton.

“Boeing has also expended a lot of political capital in Congress and with certain members of Congress in particular,” Hamilton said, “and simply folding its tent without continuing the fight almost certainly would set well with these members.”

Boeing instead might buy time by protesting the new specifications as being unfair last minute changes to an well-established standard. At the least, the protest will buy Boeing more time to do its homework on alternate planes.

John Gillie: 253-597-8663

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