Northrop Grumman on Tuesday won the Pentagon contract to build a fleet of stealthy planes known as the Long Range Strike Bomber, a new generation of aircraft designed to reach deep into enemy territory.
Northrop beat out a team of Boeing and Lockheed Martin in the high-stakes competition for a project likely to be one of the Pentagon’s most significant over the next decade.
In announcing the award, valued at nearly $60 billion, Defense Secretary Ashton B. Carter said the program represents a “technological leap” that will allow the United States to “remain dominant.”
The bomber, which will be capable of carrying nuclear weapons, is a “strategic investment for the next 50 years,” Carter said.
The competition was to build 100 of the planes that would enter service in the 2020s and become a successor to the fleet of aging bombers now in service. After years of planning, the announcement of the award finally shed some light on a project that has been shrouded in secrecy. The Pentagon has not disclosed what the planes will look like or detailed all of their capabilities.
“This is the last combat aircraft contract for another 10 years, at least,” said Richard Aboulafia, an aerospace analyst with the Teal Group.
The competition featured three of the nation’s largest defense contractors. Falls Church-based Northrop was so eager to win the award it ran an advertisement during the Super Bowl in some markets, touting its aerospace legacy.
But despite its long history as a major defense supplier, including of the B-2 bomber, Northrop was no longer a prime contractor on a major military jet program, and therefore had much to lose, analysts said.
By contrast, Boeing makes the F/A-18 Hornet and the KC-46 refueling tanker, and Lockheed Martin is the manufacturer of the F-35 Joint Strike Fighter, which is poised to replace several existing planes. A win for the team that included those companies would have further solidified their status atop the military aerospace chain.
That was especially true for Bethesda-based Lockheed. Not only is it the prime contractor on the $400 billion F-35 fighter program, it recently acquired the Sikorsky aircraft company, maker of Black Hawk helicopters, and it is under contract to build a new fleet of presidential helicopters
With so much at stake, some analysts predicted that Northrop might have had to spin off its aerospace division if it lost. But the Pentagon has signaled recently that it is growing increasingly concerned about consolidation in the defense industry after Lockheed Martin acquired Sikorsky.
The Boeing and Lockheed Martin team said in a statement it was disappointed by the result and did not rule out a protest.
“We are interested in knowing how the competition was scored in terms of price and risk, as we believe that the combination of Boeing and Lockheed Martin offers unparalleled experience, capability and resources for this critically important recapitalization program,” the companies said.
The Pentagon had previously said that each plane would cost $550 million in 2010 dollars. Air Force officials said they laid down that marker early in the program to signal how firm they would be on price. In the Pentagon briefing Tuesday afternoon, William LaPlante, the Air Force’s top acquisition official, said that an independent cost estimate put the price at $564 million per aircraft in current dollars, a figure he said was “reasonable and achievable.”
He said there are also more than $20 billion in development costs.
In a meeting with reporters last week, LaPlante and Lt. Gen. Arnold Bunch, his military deputy, said officials have gone to great lengths to prevent the kinds of problems that have plagued other programs. They have assigned a special team of acquisitions officials, known as the Rapid Capabilities Office, who handle classified programs with a track record of delivering “eye-watering capabilities,” LaPlante said.
Program officials have also worked hard to guard against “requirements creep,” where new bells and whistles are added to a program, invariably making it more complicated and expensive.
The B-2 bomber became a symbol of that type of failure. Initially the Pentagon planned to buy 132 of the B-2s but ended up buying 21 for about $2 billion each as the Cold War ended.
“Why are we more confident about this program than many others?” Bunch said. “Over the last three years the program office has worked very closely with industry to ensure the designs and the requirements have remained stable.”
The bomber contract comes as Pentagon officials are concerned that the advantages the United States has long had over potential adversaries is eroding. There is particular concern that countries are able to keep U.S. fighter planes away out to greater distances.
The new bomber would give U.S. officials the ability to penetrate deep into enemy territory, undetected, to unleash massive amounts of ordnance.
“We want to strike any target, at any time, and that’s what this platform is designed to do,” Bunch said.