"Company officials are strongly considering the option of not submitting a proposal as the company's Integrated Defense Systems sector tries to respond to the draft RFP within the government's speedy timeline," the aerospace industry magazine said, citing "multiple" sources familiar with Boeing's internal discussion.

The Defense Department last Wednesday presented Boeing and Northrop Grumman with revised terms for a request for proposal (RFP) for a 35-billion dollar contract to produce a new generation of aerial refueling tankers.

The contract is for 179 aircraft, the initial phase of a fleet replacement project worth some 100 billion dollars over the next 30 years.

The preliminary comments are due this week, Aviation Week noted in the article on its website.

The new draft RFP addressed criticism by congressional auditors that forced the Pentagon to rebid a contract that had been awarded in February to Northrop Grumman and its European partner EADS.

Contacted by AFP, Boeing neither confirmed nor denied the report.

"Boeing is not discussing the internal deliberations regarding the tankers' competition," said Dan Beck, a Boeing spokesman.

"We've submitted our comments ... we're meeting with the government representatives tomorrow (Tuesday) at the Wright-Patterson Air Force base to discuss them."

Boeing shares were 1.58 percent lower at 66.79 dollars around 1710 GMT in New York trade.

Northrop Grumman last week applauded the Pentagon's decision to keep the contract on a fast track with a final decision due in the first week of January.

"We are reviewing the draft RFP with an eye toward ensuring that it addresses the issues raised by the GAO (Government Accountability Office) in a way that facilitates a fair and non-political evaluation of the competing bids," said Northrop vice president Randy Belote.

The changes also were briefed to members of Congress, where the air force's initial decision to award the contract to a team using EADS's Airbus airframe raised a storm of protests with protectionist overtones.

The GAO in June upheld a challenge of the decision by Boeing, saying it found "significant errors" in the air force's evaluation of the two bids.

The air force's attempts to find a replacement for its aging tanker fleet have run into setback after setback, beginning with a procurement scandal in 2003 that dashed its plans to lease the aircraft from Boeing.

Boeing has been the air force's sole supplier of air refueling aircraft, but its grip on the business appeared to slip in February when the air force chose Northrop Grumman and EADS to build the next-generation aircraft.

The air force preferred their KC-45 entry, a militarized version of the Airbus 330, because it was larger and could carry more fuel and cargo than Boeing's KC-767, a modified version of the Boeing 767.

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