The interactions of the dozen or so largest U.S. defense contractors usually resemble an intricate minuet performed by gigantic dinosaurs with an infinite number of interacting appendages. The business of the biggest contractors is often closely intertwined. It is routine for divisions of one giant contractor -- units that as companies of their own would be worth hundreds of millions of dollars, or even billions of dollars in their own right -- to work closely and harmoniously with subcontractors for rival corporations. Even when competition may be intense for a particularly big contract, there is usually little, if any, bad blood afterward, at least in public.

However, the giant corporations of the U.S. defense industry are also like major nations that control their own territories and empires. Companies will develop areas where their own specialty will be taken for granted. General Dynamic Electric Boat therefore is the company that makes nuclear submarines. The Boeing Co. builds the finest strategic bombers and airliners in the world and breathtaking anti-ballistic missile systems too. Lockheed Martin is famous for the Patriot anti-ballistic missile for which it is the prime contractor.

But occasionally, just as entire provinces may change hands in a war, or overseas colonial empires become independent or change hands, one giant corporation will win a contract in an area which another corporation has looked upon as its own traditional preserve. This happened under the Clinton administration when Boeing won the main orders for the Future Intelligence Architecture -- the next generation of U.S. intelligence, surveillance and reconnaissance satellites, wresting the business from Lockheed Martin, which had been dominant in the field for more than 30 years.

Now Boeing has suffered the same fate in the air tanker market. It has provided the U.S. air force with its fleet of KC-135 air tankers -- originally versions of the Boeing 707 -- for more than half a century. The KC-135s have been flying since the Eisenhower administration and Boeing has done a superlative job of keeping them reliable and efficient for decades longer than their original projected operational life.

But nothing lasts forever, and over the past decade the KC-135s have been more in demand than ever, serving the Air Force's proliferating new military commitments from Kosovo to Afghanistan to Iraq. The time for their replacement was long overdue.

Boeing understandably was confident -- and even complacent -- that it would get the order to replace them with its new KC-767 air tanker. After all, no other corporation in the world knew as much about air refueling tankers, had built so many of them or had operated them efficiently for so long as Boeing.

But nothing lasts forever in the world of military weapons systems and procurement either. Northrop Grumman joined forces with the German and French run European Aeronautics Defence and Space Co. on a proposal to adapt the European A-330 Airbus into the KC-45A air tanker.

The odds against Northrop Grumman and EADS winning seemed enormous. First, there was Boeing's 52-year record in having a lock on the USAF's air tanker business.

Second, Boeing and Airbus are currently locked in a bitter row embroiling the U.S. government and the European Union over the European governments' massive subsidies to Airbus trying to make it more competitive than Boeing in the world market.

This enormous level of government subsidy and support is a significant reason why EADS was able to undercut Boeing on projected costs of the sale.

Boeing also claims that the U.S. Air Force found that operational costs will be much higher on operating the KC-45A. And since the KC-45A is a much larger aircraft than the KC-767, its fuel operating costs will be much higher too.

However, the KC-45A's larger size will give it a longer range and enable it to carry much more fuel than the KC-767, though Boeing argues that this was not in the Air Force's original specifications for the aircraft it said it wanted.

But where Northrop Grumman and EADS clearly beat Boeing hands down was in their hunger for the contract and the efficiency and aggressiveness with which they went after it.

Next: Northrop Grumman's campaign

Related Links
The Military Industrial Complex at SpaceWar.com
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