Rejected for military contract, Boeing could contest decision

By Dan Catchpole
Everett Herald Writer

Boeing and Lockheed Martin left open the possibility of contesting the Pentagon’s selection of Northrop Grumman to build a new stealth bomber for the U.S. Air Force.

The two companies had partnered to compete for the contract, which is expected to be worth more than $50 billion.

“The Boeing and Lockheed Martin team is disappointed by today’s announcement,” the companies said in a joint statement released Tuesday after the contract announcement.

They “will have further discussions” with the Air Force “before determining our next steps,” they said. “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 statement doesn’t commit Boeing and Lockheed Martin to any course of action. But it certainly leaves open the possibility of protesting the bomber contract going to Northrop Grumman.

The Air Force had to go through three rounds of bids for its new KC-46 aerial refueling tanker, which is assembled by Boeing at its Everett plant.

The future of Boeing’s military aircraft division is somewhat uncertain. The major programs it acquired from its 1997 merger with McDonnell-Douglas have either shut down already or are at least closer to the end than the beginning of their production run. That includes the C-17, F-15 and even the F/A-18 Super Hornet.

Boeing’s newest military airplanes — the KC-46 tanker and P-8 sub hunter — are based on commercial jetliners.

The Pentagon has made clear that it does not want to see further winnowing of the defense industry.

It likely won’t “stand idly by” and let Boeing close down its military aircraft business, RBC Capital Markets analyst Rob Stallard said in a note sent to clients after the bomber contract was announced. The Defense Department could throw some other contracts, such as for drones, to Boeing to “help offset the pain” of losing the Long Range Strike Bomber contract.


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