Boeing Co. ( W 500/12) and Lockheed Martin Corp. (IW 500/30) won’t ask a federal court to overturn a stealth-bomber contract awarded to Northrop Grumman Corp., (IW 500/49) people familiar with the situation said, allowing the $80 billion program to move forward without risk of a lengthy legal fight.
The decision by the two biggest U.S. defense contractors, which bid jointly for the top-secret project, clears the way for Northrop to develop one of the biggest U.S. weapons systems of the next decade. The Government Accountability Office this month rejected a protest filed by Boeing and Lockheed. The people familiar with the situation asked not to be identified because Boeing and Lockheed’s decision hasn’t been announced.
“If we choose not to pursue our protest further in the interest of our Air Force customer and the warfighter, or otherwise, we will inform the Air Force and other stakeholders of the decision first,” Boeing said by e-mail. “We have no new information to share at this point.”
Northrop, shut out of prime contracts for U.S. warplanes since the B-2 in the 1980s, was chosen by the Air Force in October to produce the military’s first new bomber since the Cold War. After the recent GAO decision, the Air Force lifted a stop-work order imposed on Northrop when the protest was filed.
Senate Armed Services Committee Chairman John McCain threatened to defund the contract for the Long-Range Strike Bomber in the next defense authorization bill because it isn’t based on a fixed price. Rather, the Pentagon would reimburse Northrop for costs and performance estimates of engineering, manufacturing and developing the aircraft.
Such so-called cost-plus accounting is “an evil that has grown and grown and grown over the years, and I will not stand for it on any weapons system,” McCain told reporters at a breakfast Thursday. The Arizona Republican also criticized the secrecy around the program, noting that the Air Force hasn’t disclosed the engine maker or other key subcontractors.
“They can do whatever the hell they want,” McCain said of the Air Force contract to Northrop. “We authorize the procurement of equipment.”
The Air Force offered to meet with McCain and said in an e-mailed statement that Northrop would be subject to a firm, fixed-price agreement for the first 21 aircraft, the most expensive of the planned 100-bomber fleet.