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Boeing won the U.S. Air Force’s $35 billion contract to build 179 aerial refueling tankers, Pentagon and Air Force officials announced Thursday.

Boeing’s 767-based NewGen Tanker competed against EADS North America’s Airbus A330-based KC-45 tanker in the Air Force’s third try at starting to replace Eisenhower-era Boeing KC-135 Stratotankers.

An initial 2003 lease deal for new Boeing tankers fell apart under a cloud of scandal. The Air Force then chose a Northrop Grumman-EADS tanker over a Boeing offering in 2008, but Defense Secretary Robert Gates threw out that result after congressional auditors found serious flaws in the process. This award may also be appealed.

Boeing said a tanker win would mean an estimated 11,000 jobs in Washington, including at the company’s Everett 767 assembly line, and a total of 50,000 jobs nationwide. EADS North America said its tanker would support 48,000 U.S. jobs.

Northrop Grumman pulled out of the latest contest, saying the Air Force’s criteria favored Boeing’s smaller plane. But EADS North America said it could offer a better price, despite the size difference, because it no longer had Northrop’s need for profit, Airbus is producing A330s at a higher rate than Boeing is building 767s, lowering costs, and existing A330-based tankers and refueling systems are closer to KC-45 than existing 767-based tankers and systems are to NewGen, meaning less development risk.

Analysts gave EADS the edge in recent weeks, after release of battlefield assessments of the two tankers reportedly showed a big advantage for the KC-45. The Air Force sent the assessments to both bidders accidentally, at first, and then shared the data again after learning that an EADS employee inadvertently looked at the Boeing information.

The contest was highly political, given the tens of thousands of jobs at stake in the competition, particularly because Boeing’s 767 line only has 49 remaining unfilled commercial orders. Boeing and its advocates charged that the KC-45 was a European tanker, and EADS could offer a cut-rate price thanks to illegal European subsidies to Airbus.

EADS countered that it would assemble its tanker in Mobile, Ala., and that Boeing was also found to have benefitted from illegal subsidies.

The maneuvering continued up to the final moments the contest, with EADS North America Chairman Ralph Crosby Jr. calling Boeing “irresponsible” earlier this month for attempting to win at all costs and Boeing tanker spokesman Bill Barksdale calling Crosby’s comment “reckless.”

Govs. Chris Gregoire of Washington and Sam Brownback of Kansas wrote to President Barack Obama on Feb. 15, saying Boeing’s tanker best meets the Air Force’s needs, would save taxpayer money and support more U.S. jobs, while the EADS tanker “will be built in Europe with a small portion of the outfitting work done in the United States” and is competitive only thanks to subsidies, which should be considered in the contest.

In response, Govs. Robert Bentley of Alabama, Haley Barbour of Mississippi and Bobby Jindal of Louisiana wrote to President Obama on Wednesday that the illegal subsidies “are far from conclusively determined by the World Trade Organization,” that Boeing also received illegal subsidies and that EADS would produce its tankers in Mobile, creating “a much-needed economic ripple effect across a Gulf Coast region still reeling from natural and man-made disasters.”

The bid criteria awarded the contract to the lowest-priced tanker, after adjusting for the battlefield assessment, fuel use and required air base construction, assuming both planes met requirements and one was more than 1 percent cheaper. If the offers were within 1 percent, the Air Force would have considered additional criteria.

Washington state’s political leadership applauded the Air Force’s decision.

Gregoire called it ” a great day for The Boeing Company, and for the 11,000 aerospace workers in Washington state alone that will play a role in assembling the NewGen tanker. Following an open, transparent process, the Department of Defense realized what I’ve been saying all along — and that is that Boeing has designed the safest, most cost-effective tanker to serve both our military and our taxpayers well.

“I commend The Boeing Company for its determination and tremendous work to land this contract. This was an arduous process, and Boeing deserves our praise for its commitment to its workforce, as well as the men and women that serve in the U.S. Air Force. ”

U.S. Sen. Patty Murray called the decision “the right one for our military, our taxpayers and our nation’s aerospace workers.”

She added: “This decision is a major victory for the American workers, the American aerospace industry and America’s military. And it is consistent with the president’s own call to ‘out-innovate’ and ‘out-build’ the rest of the world. “…It has been a long and hard-fought competition, but I have been proud to stand side-by-side with our state’s aerospace workers and I look forward to being there when the first new tanker rolls off the line.”

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