WASHINGTON (AP) --

 The Pentagon is expected to announce Wednesday whether the Air Force will rebid a $35 billion contract to build new refueling tankers.

Several lawmakers have been told the agency will decide how to move forward after a government report found major flaws in the decision to award the lucrative contract to Northrop Grumman Corp. and its European partner over Boeing Co.

Last month, a Government Accountability Office report said Boeing might have won the contract if the Air Force had not made mistakes in evaluating the competing bids. The GAO recommended the service hold a new competition.

Defense Secretary Robert Gates says he takes the GAO report "very seriously."

Gates is overseeing the decision on how the Air Force should respond.