Tags: Northrop Grumman | Lockheed Martin | Boeing | Air Force | bomber

Companies Compete for $55B Pact to Build New Air Force Bomber

By    |   Wednesday, 15 April 2015 12:56 PM

Ten years before the Air Force's first new stealth Long Range Strike Bomber takes to the skies, war already is raging between two aerospace firms companies over who will build it.

With a contract for $55 billion at stake, and military cutbacks on investments in new weapons systems making for a less lucrative overall market, Northrop Grumman and the team of Lockheed Martin and Boeing see winning the struggle as essential to their futures as military contractors, Politico reports.

The tactics in the battle are low on firepower but high on the seeking of influence — airing dueling advertisements of their capabilities, storming the offices of both Pentagon and congressional officials with hordes of lobbyists and building political action funds to contribute to candidates in attempts to influence the Pentagon's decision, said to be coming this summer.

Richard Aboulafia of the aerospace consulting firm Teal Group, told Politico, "There’s an awful lot at stake here, both in terms of dollars and the future of two companies as military air framers. If Boeing doesn’t get it, then they can make a choice: either get out of combat aircraft or buy Northrop’s aircraft unit. If Northrop doesn’t, well, that’s the end of any dream of ever being a military air framer again, or a combat air framer again."

States are getting into the bid war, too, with California offering $500 million in incentives to have the construction work done in Palmdale, while Florida legislators are offering incentives to get the project, once awarded, built in Melbourne, Politico notes.

Northrop has raised $3.3 million in political action money, according to filings with the Federal Election Commission, while Lockheed has $1.8 million and Boeing has $745,000 available for contributions to political campaigns.

The contract calls for the construction of  80 to 100 aircraft, at a cost of $550 million apiece, Defense One reports.

However, for whichever company loses the initial contract battle, the war will be far from over.

The bomber will be designed with "modularity" in mind, meaning that as the bombers age, it will be cheaper and easier to install electronic upgrades, and those contracts also will be open for bidding.

In addition, the losing firm can be expected to challenge the granting of the initial contract. In 2008, Northrop and Airbus won the contract to build the KC-X program air refueling tanker but after Boeing protested, the firm eventually forced a re-bid and won, Politico notes.

Lockheed and Boeing are believed to have the inside edge because of their capability but Northrup is "investing very significantly" in research directly applicable to the bomber, government contract consultant Jim McAleese told Politico.

The system is not expected to be integrated into the U.S. fleet until the mid-2020s.

Retired Air Force Maj. Gen. Curtis Bedke told Politico, "Both companies have a chance. There’s a good chance it’s a real fair fight."

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Ten years before the Air Force's first new stealth Long Range Strike Bomber takes to the skies, war already is raging between two aerospace firms companies over who will build it.
Northrop Grumman, Lockheed Martin, Boeing, Air Force, bomber
Wednesday, 15 April 2015 12:56 PM
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