U.S. Air Force bomber contract due in early August: sources

Reuters News
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Posted: Jun 05, 2015 9:21 AM

By Andrea Shalal

WASHINGTON (Reuters) - The U.S. Air Force is expected to unveil in early August whether Northrop Grumman Corp, maker of the B-2 bomber, or a Boeing Co-Lockheed Martin Corp team will build a new U.S. long-range bomber, sources familiar with the competition said.

The top-secret "source selection" process, which could be worth $50 billion to $80 billion to the winning bidder, is nearly complete, with the decision still to be reviewed by top U.S. government lawyers and other officials, said the sources, who were not authorized to speak publicly.

The two teams are competing to build 80 to 100 new bombers for the Air Force at cost of no more than $550 million per aircraft.

Air Force officials initially expected a contract to be awarded this spring, but the target slipped to July several months ago. Last week General Herbert Carlisle, head of Air Combat Command, suggested for the first time the closely watched announcement might not come until August.

The process is winding down, and an announcement now appears likely in early August, the sources said Thursday and Friday.

The Pentagon’s top acquisition official, Frank Kendall, told Breaking Defense, a news website, in an interview late Thursday that he and Air Force acquisition chief William LaPlante had just completed a review of the program.

“We looked at the design to make sure it’s at the level of maturity it’s supposed to be,” Kendall was quoted as saying.

Kendall is the "Milestone Decision Authority" for the program, which means he is accountable for its cost, schedule, and performance, his spokeswoman said.

LaPlante told reporters in May that he expected a decision in one to two months, but that he was focused on ensuring the decision was carefully justified, rather than meeting a specific deadline.

Analysts say the decision will have a huge impact on the U.S. defense sector, particularly the losing team, although Kendall has repeatedly said he does not expect the outcome to trigger a major merger or acquisition.

Kendall has said the decision will be made on the merits of the proposals, not the potential impact on the industrial base.

Loren Thompson, a defense consultant and chief operating officer of the Lexington Institute, said the decision would be made purely on the basis of price and performance.

(Editing by Jeffrey Benkoe)