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Boeing, Northrop Tanker Contest Postponed

Shares of both companies fall on the news.
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The Pentagon is reportedly halting the contest to find a new builder of its flying tankers, saying it couldn't make a decision before January.

Initially, the $35 billion contract was awarded to

Northrop Grumman

(NOC) - Get Northrop Grumman Corporation Report

and the parent company of Airbus, but

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Boeing

(BA) - Get Boeing Company Report

, which had also submitted a bid, challenged the agreement. The Government Accountability Office sided with Boeing, and the Defense Department said it would review the matter.

The GAO said during its examination that the Air Force "made a number of significant errors that could have affected the outcome of what was a close competition."

Shares of both Boeing and Northrop were declining Wednesday. Boeing was down 2.8%, and Northrop was off 1.3%.

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