On the one hand, Boeing fucked up the project badly. On the other hand, the contract was written so Boeing ate the $5B+(?) in rework / deficiency remediation.
Reading more around it, Northrop Grumman won the initial contract with an Airbus model and Boeing complained, got the proposal rewritten in their favour. They had an official who passed them info and got a highly inflated contract written, who was then jailed for corruption, Boeing was fined and the CEO was fired. Yet the US is still going with them for the tankers despite the ongoing problems that still aren't resolved. The Airbus version has now been in service in other countries for 10+ years. https://en.m.wikipedia.org/wiki/KC-X
From memory, without looking back through Wikipedia, the original contract award was killed. Then Boeing won the new bid.
Acquisition at that level is extremely cutthroat, so who knows what happened.
The broader perspective is that the current major aircraft contracts are:
- F-35 Lockheed-Martin
- B-21 Northrop Grumman
- KC-46 Boeing
- X-37 (Space) Boeing
- MQ-25 (Naval Refueling) Boeing
That seems like a pretty fair spreading of contracts among the remaining majors, especially if you had less faith in Boeing to produce combat equipment, but still wanted to maintain it as a company.
We do know what happened though. Boeing used an insider to pass information about their competitors bids and then gave them a high paying job with a large sign on bonus.
They got the contract killed because they knew they could work up a furor about a European design being used by the US. Of course it's fine in the other direction.
There's legitimate reasons to not want to depend on an ally for equipment but in this case it seems that Boeing haven't been able to deliver on it at all. Losing might have been a good kick up the ass to improve for the next time this type of contract comes around.