Northrop Grumman has said that it might not bid for the $40bn aerial refuelling tanker aircraft deal unless major changes are made in the selection process.
The US Air Force plans to buy 179 converted civilian jetliners for air refuelling missions and the acquisition programme is a second attempt after the failure to procure aircraft in 2008 due to controversies.
Boeing, the other bidder for the contract plans to present a 767-based tanker, while Northrop will enter a modified Airbus A330 jet as a candidate for the deal, according to the Wall Street Journal.
The Pentagon guidelines, according to Northrop, place the firm at a disadvantage since Boeing's tanker is smaller and cheaper than its aircraft although due to its larger size it can carry more fuel.
Industry speculations indicate that the pull-out is a calculated but high-stakes strategy that will pressure Pentagon to introduce modifications.