WASHINGTON - Alabama officials expressed optimism Wednesday that the state will still be the U.S. assembly hub for new Air Force refueling tankers even after the Government Accountability Office upheld a protest that could delay or overturn the contract.

The GAO ruling raised significant questions about the Air Force's decision in February to award the work to Northrop Grumman Corp. and European Aeronautic Defence and Space Co., which plan to assemble the planes at Mobile's Brookley Field Industrial Complex.

But just minutes after the decision was announced, Northrop Grumman sent out a press release reiterating its plans to hold a June 28 groundbreaking at the Alabama site. Elected officials said they would continue fighting for the $600 million plant, which could host some 1,500 jobs.

"I am obviously deeply disappointed and surprised," Rep. Jo Bonner, a Republican from Mobile, said of the decision. But, he added: "A couple of things seem clear: The Air Force desperately needs a new tanker to replace a fleet nearing 50 years old, and the Air Force still believes the Northrop Grumman/EADS tanker best meets its needs."

Gov. Bob Riley, Mobile Mayor Sam Jones and others offered similar reaction.

"The most important thing that I saw in this was that they were not questioning the merits of the aircraft," Jones said. "It seemed to me they were saying some of the wording did not clearly convey information to the bidders ... we'll just have to see what the Air Force response is to that."

The contract, which has spawned a fierce political battle on Capitol Hill, pits the international Northrop Grumman/EADS team against U.S.-based Boeing Co. It is worth $30 billion to $40 billion over 10 to 15 years and could be even more lucrative -- it is the first of three deals to replace the Air Force's entire fleet of nearly 600 tankers.

EADS, parent of Airbus, already has opened an engineering facility at Brookley in anticipation of assembling the tanker here.

To lure the projects, state and local government agencies offered the companies a $110 million package of incentives, including tax breaks and cash to help with plant construction. The incentives are contingent on Mobile winning the tanker work.