It’s not at all clear that this was a military decision. Seems that different congresscritters had political reasons for wanting to bring jobs to THEIR district, and that some irregularities may have been introduced into the bidding process.
Even when most of the jobs in question will be located in the US either way, I think it’s a good idea to have a policy of critical military equipment made my US companies unless there’s really a huge benefit in quality and/or cost to having it made by a foreign company. In times of war, political alliances tend to do some shifting, and a country which is an ally at the time a contract is awarded may be at odds with US interests in a wartime scenario. That’s when pressure from a foreign government on companies based in the foreign country could have a seriously detrimental effect on our military effort.
Seems pretty clear it was to me:
TANKER COMPETITION: NORTHROP WON BY A WIDE MARGIN
...Here's how they were evaluated...
1. Mission capability. Arguably the most important factor, this metric compared the teams on performance requirements, system integration & software, product support, program management and technology maturity. The teams tied in most measures, but the Northrop offering was deemed to offer superior refueling and airlift capacity at 1,000 nm. range and substantially superior refueling and airlift capability at 2,000 nm. range. The superior airlift capacity of Northrop's plane was deemed a "compelling" consideration in giving Northrop the edge for this factor.
2. Proposal risk. This is the sole factor in which Boeing managed to match the appeal of the Northrop proposal, but it did so only after being pressed to accept a longer development schedule for its tanker. The Boeing proposal was initially rated as high-risk because reviewers felt the company was offering a plane that in many regards had never been built before, and yet claiming it could be built fast at relatively low cost. The company was forced to stretch out its aggressive schedule, adding cost.
3. Past performance. The Northrop Grumman team received higher ratings in past performance due to satisfactory execution of half a dozen programs deemed relevant to the tanker competition. Air Force reviewers had less confidence in Boeing's past performance due to poor execution in three relevant programs. In addition, Northrop's subcontractors were rated more highly on past performance than Boeing's.
4. Cost/price. This was the factor in which many observers expected the Northrop-EADS team to shine, because EADS subsidiary Airbus usually underbids Boeing in commercial competitions. But Boeing compounded its difficulties in the eyes of reviewers by failing to adequately explain its assumptions in calculating the cost of developing a tanker. The resulting low confidence in Boeing cost projections undercut its claims of lower life-cycle costs. Northrop was rated higher.
5. Integrated assessment. The "integrated fleet aerial refueling assessment" was designed to compare how the competing planes would fare in an operational setting using a realistic wartime scenario. The review found that the Northrop Grumman proposal could accomplish specified missions with nearly two dozen fewer planes than the Boeing proposal, a big advantage.
So Northrop Grumman's victory was not a close outcome. Although both proposals satisfied all performance requirements, the reviewers concluded that if they funded the Northrop Grumman proposal they could have 49 superior tankers operating by 2013, whereas if they funded the Boeing proposal, they would have only 19 considerably less capable planes in that year. The Northrop-EADS offering was deemed much better in virtually all regards.