Two giants of the defense industry, Boeing and Lockheed Martin, are ganging up against competitor Northrop Grumman, saying that the U.S. Air Force’s $80 billion decision to buy new stealth bombers from the company is “fundamentally flawed.”
They are arguing their bid was of better value and are asking the Government Accountability Office (GAO) to review the decision. At this stage, the Air Force is sticking by it decision to choose Northrop to build what it is calling the Long Range Strike-Bomber (LRS-B).
Air Force spokesman Major Robert Leese, says, “Although it is every competitor’s right to file a protest, the Air Force is confident that the source selection team followed a deliberate, disciplined and impartial process to determine the best value for the warfighter and taxpayer.The Air Force will fully support the GAO’s independent process. Once resolved, we look forward to proceeding with the development and fielding of the LRS-B aircraft.”
The Boeing and Lockheed Martin protest is the latest in an industry-wide trend to protest and contest Pentagon procurement decisions which frustrate military commanders and Defense Department buyers who are forced to wait until investigations into the decisions are complete.
In a recent statement to the defense industry, Pentagon’s newest Defense Intelligence Agency chief Lt. Gen. Vincent Stewart wrote, "Quit protesting everything."
Northrop and Boeing have been involved in contentious protests previously, most notably in 2008 when the Air Force choose Northrop and Airbus to build a new aerial refueling tanker airplane. In that incident, GAO upheld the protest and Boeing won when the project came up for re-tender.
In 2013 there were 1,365 official Pentagon contract award protests compared to 602 in 2001, according to data compiled by Pentagon acquisition chief Frank Kendall.
“The increased number of protests appears to reflect external industry strategies or competitive pressures from the declining Pentagon budgets rather than poor Pentagon source-selection performance,” says Kendall.
Over recent years, there have been less big-dollar defense projects, so the $80 billion price tag for the new stealth bomber drew a lot of attention. The project is aiming for 100 new stealth planes over the next 25 years, replacing the current stable of B-1 and B-52 bomber.
An analyst with Capital Alpha Partners Byron Callan says, “We assign a 15 percent probability GAO would overturn the program award and reopen the competition.”