Boeing assembly mechanic Ryan Schutt works on the interior of a Boeing 767 in this June 18 file photo at the 767 assembly line at Boeing's Everett, Wash., plant. Boeing Co. will have the opportunity to participate in a disputed 5 billion Air Force tanker contract after it was previously awarded to Northrop Grumman Corp. in February.

New York ? The Department of Defense said Wednesday it will reopen a $35 billion contract to build its next generation aerial refueling tankers, giving Boeing Co. a second chance to beat its rivals Northrop Grumman Corp. and its partner Airbus.

Boeing was furious when Northrop won the award in February, and said in a protest to the Government Accountability Office that the Air Force bidding process was flawed and unfair. Last month, the agency said it mostly agreed with Boeing, and it was believed the Air Force would follow its recommendation to reopen the bidding process.

In a briefing before reporters, Defense Secretary Robert Gates, pressured to replace the military’s antiquated tanker fleet, said he wants new draft proposals from the companies within a month and to have a new contract awarded by the end of the year.

Gates also said the military will closely follow the GAO recommendations on how to improve the bidding process.

The Air Force wants to buy 179 tanker jets capable of hauling cargo and refueling other airplanes in the air.

The GAO ruling in favor of Boeing was another embarrassment for the Air Force and a program racked with problems.

Last month, Gates fired two top Air Force officials, Secretary Michael Wynne and Gen. Michael Moseley.

The move raised speculation that Gates knew ahead of time that the GAO report was going to reopen the contract and rebuke the Air Force’s decision-making process.

On Wednesday, Gates said Sue Payton will remain the assistant secretary of the Air Force for acquisitions, but that John Young, defense undersecretary for acquisition, would now play a greater oversight role.

Young also ruled out any possibility that the contract might be split between the two rivals, saying it wouldn’t yield the price benefits of using just one manufacturer.