U.S. picks Northrop Grumman to build next long-range bomber

Reuters News
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Posted: Oct 27, 2015 11:25 AM

By Andrea Shalal

WASHINGTON (Reuters) - Northrop Grumman Corp, which makes the B-2 bomber, beat out a team made up of Boeing Co and Lockheed Martin Corp to develop and build a next-generation long-range strike bomber, the U.S. Defense Department said on Tuesday.

The announcement ended months of anticipation and marked the biggest contract award by the Pentagon in over a decade, a deal analysts have said could be valued at up to $80 billion if the U.S. Air Force buys all 100 stealth bombers now planned.

Air Force Assistant Secretary Bill LaPlante told a news conference the contract was valued at $21.4 billion in 2010 dollars for engineering and manufacturing development for the first batch of 21 aircraft.

He said the average procurement cost for the bombers was $564 million per aircraft for 100 bombers in 2016 dollars.

"Building this bomber is a strategic investment in the next 50 years," U.S. Defense Secretary Ash Carter told reporters. "It demonstrates our commitment to our allies and our determination to potential adversaries, making it crystal clear that the United States will continue to retain the ability to project power throughout the globe long into the future."

The award marks the Air Force's second drive to start replacing its aging B-52 and B-1 bombers in recent years. Former Defense Secretary Robert Gates canceled the first program in 2010 because he thought it was too ambitious and expensive.

The Air Force kicked off the current competition in July 2014 and had hoped to select a winner during the spring, but the award was delayed several times.

The losing team is likely to protest the contract action, given the high stakes involved and the dearth of new programs in the current budget climate, said defense consultant Jim McAleese. Air Force officials said any company has the right to file a protest about the awarding of the contract.

The losing side is also likely to intensify its focus on two other Air Force programs - a new training aircraft called T-X valued at $12 billion, and a new airborne surveillance, battle management and command and control aircraft called JSTARS, which is valued at $9 billion.

LaPlante told reporters last week the new bomber would have some components that were already in use in secret programs, which would help reduce the risk of technology problems later on and keep the program on track.

(Reporting by Andrea Shalal; Additional reporting by Will Dunham and Idrees Ali; Editing by Alan Crosby and Peter Cooney)