Bloomberg, 6/12/8

Boeing Co. and Northrop Grumman Corp., locked in a three-month dispute over a $35 billion U.S. Air Force refueling-tanker contract, may wind up in court before the fight is done.

Northrop and partner European Aeronautic, Defence & Space Co. won the contract Feb. 29 by beating Boeing, the Air Force's only supplier of the aircraft for half a century. Boeing protested the award to the U.S. Government Accountability Office, a congressional watchdog agency that must make its recommendation to the Pentagon by June 19.

Representative Jo Bonner, Republican of Alabama, and Senator Thad Cochran, a Mississippi Republican, are backing the Northrop Grumman team that includes EADS, the parent company of Boeing's larger commercial-plane rival Airbus SAS. Airbus, which overtook Boeing in size in 2003, intends to make tanker parts in Europe and ship them to Mobile, Alabama, to assemble both the military and commercial-freighter versions.