🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

U.S. Air Force defends bomber competition process

Published 11/10/2015, 03:40 AM
© Reuters. The corporate logo of  Northrop Grumman is shown on a Fire Scout MQ-8 B unmanned helicopter in California
BA
-
NOC
-
LMT
-

DUBAI (Reuters) - U.S. Air Force Secretary Deborah James defended on Tuesday the process that selected Northrop Grumman Corp (N:NOC) to build the next-generation U.S. bomber, saying it was "very deliberate" and included a number of independent reviews.

James said the Air Force stood by its decision, announced last month. But she said it would wait to see how the U.S. Government Accountability Office (GAO)ruled on a formal protest filed against the decision by Boeing Co (N:BA) and Lockheed Martin Corp (N:LMT).

The contract to build a long-range strike bomber is expected to be worth around $80 billion to the winner in coming decades. GAO is due to rule on the issue by Feb. 16, 2016.

"We had a very deliberate process. We took our time," James said. "It was key that we do it correctly and we believe that we did do it correctly."

James said the Air Force's decision was subject to several reviews before being announced, including one carried out by the Department of Defense and a separate legal review.

Boeing and Lockheed, the Pentagon's two largest suppliers who worked as a team on the bid, said last week they believed the Air Force process was "fundamentally flawed" and did not properly evaluate the relative or comparative risk of the competing bids.

They said they were concerned about the Air Force's use of cost data from earlier bomber programs to assess the pricing of the planes, devaluing innovations and new manufacturing processes implemented in recent years, sources said at the time.

Analysts had widely expected that whoever lost out on the deal, either Boeing and Lockheed or Northrop, would protest the award, given its size and a dearth of other large-scale U.S. arms programs in coming years.

James told reporters that historical cost data was part of the process, but other factors also played a role. "It was more complex than that. It wasn't that and that alone," she said.

James said the decision was subject to a variety of peer reviews and was informed by several independent cost estimates.

© Reuters. The corporate logo of  Northrop Grumman is shown on a Fire Scout MQ-8 B unmanned helicopter in California

"Independent cost estimators, particularly when you go to multiple sources .... they do have this pesky thing called data and facts on their side more often than not," she said. "We'll just have to see where the GAO comes out."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.