Russian Company Interested in $40 Billion Tanker Contract

A Russian company said Friday it plans to enter a bid to build a new aerial refueling tanker for the U.S. Air Force, adding yet another twist to the long-running saga of the Pentagon's attempts to award one its biggest and most controversial weapons contracts.

United Aircraft, a holding company for several Russian aerospace firms, is expected to announce Monday a joint venture with an American defense contractor, according to John Kirkland, a Los Angeles-based lawyer representing the group. Kirkland would not name the U.S. contractor, saying only that it is "not one of the three or four major defense companies." United Aircraft's biggest shareholder is the Russian government, Kirkland said, according to a report in The Washington Post.

According to The Wall Street Journal, United Aircraft, an aerospace consortium owned by the Russian government, will seek to offer a tanker version of its Ilyushin Il-96 wide-body jetliner, dubbed the Il-98, this person said. The planes would be largely built in Russia, and assembled in the U.S., this person says. United Aircraft will partner with a "small U.S. defense contractor," which will be renamed United Aircraft Corp. America Inc., this person said, declining to name that contractor.

A Pentagon spokeswoman said, "the Department of Defense remains committed to a fair and open competition and welcomes proposals from all qualified offerors."

The battle for the tanker contract has been protracted and tainted with controversy. Both Boeing Co. and a team made up of Northrop Grumman and EADS originally bid for the $40 billion contract. Boeing offered an altered 767 while Airbus and Northrop proposed a modified version of an A330, MarketWatch reported.