US Defense Secretary Robert M. Gates has cancelled the competition for the $35 billion Air Force tanker contract. Gates told the House Armed Services Committee today that he decided the contract cannot be awarded by January, and that rather than award a contract that will be contested, the better idea is to let the next administration make its decision.

“It has now become clear that the solicitation and award process cannot be accomplished by January,” he said. “Thus, I believe that rather than hand the next administration an incomplete and possibly contested process, we should cleanly defer this procurement to the next team.”

Gates said he’s been assured that the current KC-135 fleet can be adequately maintained to satisfy Air Force missions for the near future, and sufficient funds will be recommended in the fiscal 2009 and follow-on budgets to maintain the KC-135 at high mission-capable rates.

“The Department of Defense, as recently as last week, stated the urgency to replace the Eisenhower-era fleet of refueling tankers. With this delay, it is conceivable that our warfighters will be forced to fly tankers as old as 80 years of age” said the statement of Brandon R. “Randy” Belote, III, Northrop Grumman vice president, Strategic Communications.