Chicago-based Boeing has been awarded an $805 million contract to develop the Navy's MQ-25A unmanned aerial refueling drone, the Navy announced Thursday, handing the company's Arlington-based defense business a much-needed win.
Bethesda, Md.-based Lockheed Martin and San Diego-based General Atomics had also vied for the opportunity. Under the terms of the contract, Boeing is to produce four of the unmanned aircraft by 2024, the first major step in a defense program that is expected to eventually exceed $7 billion.
Boeing's defense, space and security president and chief executive Leanne Caret attributed the company's win to its experience with Navy aircraft and close understanding of the service’s needs.
“As a company, we made an investment in both our team and in an unmanned aircraft system that meets the U.S. Navy’s refueling requirements,” Caret said in a statement. “The fact that we’re already preparing for first flight is thanks to an outstanding team who understands the Navy and their need to have this important asset on carrier decks around the world.”
A Lockheed Martin spokeswoman said the company would meet with the Navy to determine next steps. The company has not ruled out protesting the contract win.
“Our team is highly disappointed to learn that the U.S. Navy did not select our offering. We believe our low-risk, purpose-built MQ-25 design offered the premier solution to expand the capability of the Navy’s carrier air wing," the Lockheed spokeswoman said. "We await the customer debrief to learn more about why our offering was not selected. Any decisions about next steps will be made following that debrief.”
The MQ-25 is viewed as an important program for the Navy because it should extend the flying range of deployed fighter jets like the F/A-18 Super Hornet and F-35 Joint Strike Fighter, giving them easier options to refuel in midair.
The contract is likely to be viewed as a major win for Boeing's Arlington, Va.-based defense business, which has been smarting from a string of high-profile losses on the F-35 Joint Strike Fighter, which was awarded to Lockheed Martin, and the B-21 Raider, which went to Northrop Grumman. The company is anxiously awaiting a decision from the Air Force on the T-X Trainer program, an estimated $16 billion program, with an announcement expected by the end of 2018.
Loren Thompson, a defense consultant with the Lexington Institute, a think tank that gets funding from defense contractors, characterized the contract win as a "breakthrough" for Boeing that tightens the defense giant’s grip on the U.S. Navy’s major aircraft procurements.
Perhaps more importantly, the contract gives Boeing its first substantial foothold in the U.S. military’s autonomous aircraft efforts. That market has been largely dominated by General Atomics, the manufacturer of the MQ-9 Reaper drone.
“If Boeing were to win both the MQ-25 and the Air Force’s T-X Trainer, that would be perceived as a major turning point for its defense business,” Thompson said.
Richard Aboulafia, an aviation expert with the Teal Group consultancy, said the contract win should solidify the company’s grip on the Navy’s aviation projects.
“What makes this an important win is that the overwhelming majority of Navy carriers will be filled by Boeing planes for decades to come,” Aboulafia said.