Boeing loses out on $112 billion bomber contract: Pentagon picks up Northrop Grumman for the project

Boeing has lost the contract of Pentagon’s long range stealth bomber. The company has a long record in making war planes. Rival Northrop Grumman emerged as the winner to design and build the top-secret Long Range Strike Bomber for the US Air Force.

In the US$80 billion (AU$112 billion) worth contact, $23.5 billion (AU$32.9 billion) will be for development and $56.4 billion (AU$79 billion) for the production of 100 aircraft.

“We’re ready to get to work,” said Northrop Chief Executive Wes Bush in a statement.

Backbone of Air Force

The Long Range Strike (LRS) Bomber is being tactically designed with capabilities to strike any enemy target anywhere on earth at short notice. The first batch of aircraft is expected to be operational in the mid-2020s, reports Seattle Times.

Announcing the winner, Defense Secretary Ash Carter told a news conference that the new bomber will carry both conventional and nuclear weapons and will be “the backbone of the Air Force’s future strike and deterrent capabilities.”

However, Pentagon did not share any details why Boeing was left out or Northrop was chosen. Air Force Secretary Deborah Lee James said the decision “provides the best value for our nation.”

Boeing’s reaction

Boeing, in a statement, expressed disappointment at the decision and said it would hold further discussions with the Air Force before planning the next steps.

“We are interested in knowing how the competition was scored in terms of price and risk,” Boeing said.

Now Boeing has the option to file a protest within 100 days to put the project on hold.

Defense analyst Loren Thompson of the Lexington Institute expressed the view that “slowly but surely the walls are closing in on Boeing’s military aircraft operations in St. Louis.”

William LaPlante, assistant secretary of the Air Force in charge of acquisition, said the plane’s capabilities and specifications will remain classified “so that adversaries can’t already be trying to build defenses against it.”

Analysts say one reason for choosing Northrop is the long term plan of Pentagon to make the plane unmanned, as anytime, the bomber will be carrying nuclear weapons. Northrop has the distinction of being a leader in unmanned systems and has many unmanned surveillance aircraft to its credit, such as the RQ-4 Global Hawk and the secret, stealthy RQ-180.

Meanwhile, Biz Journals reported the preparedness made by Northrop Grumman to win the Strike Bomber contract has helped it in beating a rival that is six times ahead of it in terms of annual sales.

It said “Northrop Grumman has made a radical move to contain its costs. Under the code name Project Magellan, it has established a manned-aircraft center for excellence in Melbourne."

Referring to Northrop Grumman's 220,000-square-foot facility at Melbourne International Airport, the report said Northrop Grumman has been expanding capacity and is already adding another 500,000-square-foot facility. It said without that additional facility at Melbourne, Northrop Grumman would have found the going tough for contract.

"Northrop Grumman was putting themselves in the best position to capture that contract," noted Dale Ketcham, Space Florida's chief of strategic alliances.

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