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July 14, 2010—Southern California-based US Aerospace Inc. which has just 30 employees, was dubbed a "dark horse," a long shot, and even an "April Fool's Day joke" when it turned in its last-minute $30 billion bid for the Air Force's KC-X tanker contract July 9.

The move may have surprised defense insiders who spent the last decade following the Air Force's troubled tanker recapitalization program. But company officials say the AN-112-KC—an updated Antonov airframe designed specifically to meet KC-X requirements—is the best aircraft with the lowest cost to American taxpayers.

The AN-112-KC would be manufactured by Ukrainian state-owned aerospace giant Antonov under a strategic cooperation agreement between the two companies.

Unlike Boeing's 767-based NewGen Tanker and EADS North America's A330-based tanker, the AN-112 not only can refuel the fastest fighter in the US fleet, but can also drop below 100 miles per hour, making it capable of refueling significantly slower rotary wing aircraft, Charles Arnold, senior advisor to the US Aerospace's board of directors, told the Daily Report in a telephone interview July 13.

The AN-112's wings, which stretch 166 feet, are slicked back more like a bomber's than a typical passenger aircraft, providing more stability for hose-and-drogue operations, he said.

"We also can refuel two aircraft at the same time. We're not aware of any other aircraft that can do that," Arnold said.

The aerial refueling boom on the AN-112 is designed to deploy 1,500 gallons of fuel per minute, roughly 300 gpm more than its competitors. The wing-mounted hose-and-drogue system will offer 600 gpm, compared to about 400 gpm for the NewGen and Airbus options, Arnold said. It also is the only tanker option with a rear-loading cargo capability, he added.

In addition to the company's relatively unknown status on the aerospace stage, it is going to have to overcome concerns that the AN-112 is still just a paper concept.

Still, company officials say they are confident they will be able to stick to their $29.55 billion bid, which works out to $150 million per plane for 179 tankers, including research and development costs.

Boeing and EADS have not released program costs, but Arnold estimates US Aerospace's bid is more than $10 billion under the competition. The three companies are battling for a contract that could be worth up to $50 billion.

Arnold declined to comment on whom will provide the boom or the engines, citing nondisclosure agreements with the manufacturers; however, he said he hopes to have an announcement by early August.

US-based Pratt & Whitney and General Electric are in the running to supply the AN-112's engines. It's not clear if the boom will be made in the US.

If US Aerospace wins the KC-X contract, Arnold said the majority of the tankers will be built in Ukraine, but final assembly will be conducted in the United States. The exact location, though, is still being worked out.

"We are negotiating with several states right now. Our interest, so far, is the Southeast or the Midwest. I should have that by the end of August," he said.