Boeing, Lockheed to Protest Air Force's Long-Range Strike Bomber Decision (UPDATED)

The Boeing Co. has informed the Government Accountability Office that it plans to protest the Air Force’s decision to award the lucrative long-range strike bomber contract to rival Northrop Grumman, Forbes Magazine reported Nov. 6.

Magazine contributor and chief operating officer of the Lexington Institute think tank, Loren Thompson,reportedthat the company believes the decision process was “fundamentally flawed.”

“The company believes there were major errors both in the way the selection process was structured and in the way that it was applied,” Thompson said. The Air Force debriefed Boeing on Oct. 30. GAO now has 100 days to uphold or deny the protest. Boeing and Lockheed Martin had partnered on the program. Both companies contribute funds to the Lexington Institute, Thompson disclosed.
Boeing and Lockheed Martin later in a joint statement confirmed the protest.

“Following the debrief, Boeing General Counsel J. Michael Luttig — a former federal judge — led a team of lawyers reviewing the process used by the Air Force to award the contract. That review concluded there was extensive procedural basis for challenging the award,” Thompson wrote.

Boeing prevailed over Northrop Grumman in a protest over the KC-46 aerial tanker refueling program in 2008. Thompson said Boeing executives believe there are similarities between that case and the long-range bomber selection. They will also contend that the Air Force over-relied on historical data to make its decision and ignored recent advances that Lockheed Martin has made in manufacturing processes with the F-35 program, Thompson said. He also asserted that the Air Force has overestimated the $21.4 billion development costs and that Northrop put in a “rock bottom” bid on that portion of the contract bid.

Following the protest, Randy Belote, vice president of strategic communications for Northrop Grumman, said the company was disappointed that its former LRS-B competitors "decided to disrupt a program that is so vital to national security."

"The U.S. Air Force conducted an exceptionally thorough and disciplined process with multiple layers of review. Their process took into full account the parties' respective offerings and their relative capabilities to execute their offerings on schedule and on budget," he said. "Northrop Grumman offered an approach that is inherently more affordable and based on demonstrated performance and capabilities. Our record stands in contrast to that of other manufacturers' large aircraft programs of the last decade."

Air Force and Defense Department officials at the news conference announcing the decision revealed few details about its selection criteria.

“Boeing lawyers will argue similar defects distorted the bomber selection, although that discussion will be largely hidden from public view due to the program’s secrecy and the confidentiality restrictions imposed on parties to a protest,” Thompson said.

The loss of the bomber award was followed this week by NASA’s decision to drop Boeing from another high-profile competition to resupply the international space station, according to media reports. NASA is still in the selection process for that $3.5 billion program, but had sent a letter to Boeing officials informing them that the company was no longer in the running.

Topics: Aviation, Tactical Aircraft, Business Trends, Doing Business with the Government, Service Contracts