EADS seeks 3 more months to bid for US tanker

* Pentagon says considering EADS request

* EADS says has not decided to bid

* Says terms favor smaller, less capable aircraft (Adds Pentagon, Boeing, congressional comment, changes dateline)

By Jim Wolf and Maria Sheahan

Defense News: WASHINGTON/FRANKFURT, March 19 (Reuters) - Europe's EADS (EAD.PA) is seeking three more months to prepare a bid to build a multibillion-dollar U.S. aerial-refueling fleet in the latest twist in a nearly decade-long saga, the U.S. Defense Department said on Friday.

"We're considering that request," Bryan Whitman, a department spokesman, told reporters at the Pentagon. The current deadline is May 10.

EADS eyes new bid for Pentagon contract

Airbus parent had pulled out earlier this month after criticizing tanker contract as anticompetitive

A contest would pit EADS, Airbus' corporate parent, against Chicago-based Boeing Co (BA.N), its archrival in the commercial airliner market.

Northrop Grumman Corp (NOC.N) and EADS had bested Boeing in a similar race two years ago, only to have their award canceled after U.S. government auditors found the Air Force had failed to apply its own judging rules.

Los Angeles-based Northrop, which would have been the prime contractor, withdrew on March 8 from the latest contest, saying the Pentagon's final tender "clearly favors" Boeing's 767-based tanker over the Airbus A330 derivative pitched by EADS.

EADS could rejoin the race if it determines "there is a fair chance to win, after evaluating all relevant factors," the company said on Friday.

The Pentagon, battling charges of protectionism, had reiterated on Thursday that it would welcome an EADS bid and would consider a "reasonable" extension of time.

Whitman declined to define what the Pentagon had in mind as a reasonable delay. He said the Pentagon considered EADS a "qualified" offeror.

EADS' North American unit likely would become its own prime contractor rather than seek to partner again.

The company has not yet decided to bid, said Guy Hicks, an EADS spokesman in Washington.

Extending the deadline for bids is a critical first step, Hicks said in a telephone interview.

EADS North America became a prime contractor for the Pentagon after it was selected in 2006 to build UH-72A Lakota light utility helicopters for the U.S. Army.

In line with Northrop, EADS has said the U.S. Air Force's terms for the tanker contract, valued at up to $50 billion, were skewed in favor of Boeing's smaller 767-based tanker and do not give enough credit for the added capability of a larger tanker based on the Airbus A330.

The Airbus model has been chosen over Boeing 767 derivatives as a tanker by Australia, Britain, the United Arab Emirates and Saudi Arabia in the four most recent contests, according to EADS.

The Defense Department said on Thursday it invited proposals from qualified contractors and, if necessary, would consider pushing back the deadline. Geoff Morrell, the Pentagon press secretary, added that this was not unusual, citing a half dozen cases where deadlines had been extended.

EADS shares closed up 1.0 percent at 14.83 euros on the Paris stock exchange on Friday. Boeing shares were up nearly 1 percent in New York, lifted by the company's statements on Friday that it will accelerate planned production increases of its 777 and 747 production. [ID:nN19126100]. (Reporting by Jim Wolf and Adam Entous in Washington, and Maria Sheahan in Frankfurt; Editing by Tim Dobbyn)