Market Dominance, Efficiency, Innovation, and Globalization: A Case Study of the Tanker Competition between Boeing and Northrop Grumman/EADS

Abstract

The purpose of this analysis is to provide a case study of the competition between Boeing and Northrop Grumman/EADS for the Air Force refueling tankers contract and to discuss the role of many of these considerations in the controversy. This is an important case study because it highlights: (a) the concerns of the American people that they are continuing to lose manufacturing jobs overseas and the solutions that they are considering to lessen that problem; (b) the conflict between the concept of the US and European defense companies as partners against common threats to provide the best systems possible and the concept of them as competitors; (c) the concerns of an incumbent that it is losing its traditional edge; and (d) the desire to have an open and fair government procurement process in which all parties are able to accept the outcome that the process produces. This case study explores the background behind the contract, the reactions to the awarding of the contract, the reasons for the awarding of the contract, and the likely implications of the Boeing/Northrop Grumman-EADS competition for the competing firms, the government contracting process, and the global market.