Defense contractor Northrop Grumman announced on Monday it is dropping the bid for U.S. Air Force's 35-billion-dollar oil tanker project.

In a statement on the company's website, Wes Bush, Chief Executive Officer and President of Northrop Grumman, said the company has determined it will not submit a bid to the Department of Defense for the refueler program.

The decision enhances the prospects of Boeing, one of Northrop' s major competitors, to win the bid. Boeing announced last week it will enter the bid.