Brian Bradley
NS&D Monitor
5/1/2015
While analysts have suggested that the losing bidder for the Long Range Strike-Bomber program may exit the combat aircraft business or be a target for acquisition, the CEO for Northrop Grumman, one of the two bidders, appeared to downplay such concerns this week, saying a win would bring one more program into the company’s deep mix of projects. “It would just be one more part of a very diversified portfolio that we have in our corporation,” Northrop CEO Wesley Bush said during his company’s earnings call for the first quarter of Fiscal Year 2015. He added that his company still maintains a breadth of programs, and said he would “be careful” about prognosticating any reshaping impact the contract award would have on the industry. “No single program is out there driving us in a direction,” he said. Bush also expressed confidence about his company’s ability to deliver the new stealth bomber, noting his company’s heritage working with the B-2, which provides Northrop “a great currency of knowledge and understanding of what’s needed here.”
Northrop is competing with a Boeing-Lockheed Martin team to win the LRSB contract, which officials said is expected to be awarded sometime this summer. The Air Force plans to procure 80-100 of the aircraft at a cost of $550 million per unit. Richard Aboulafia, Vice President of Analysis at the Teal Group told NS&D Monitor last month that Northrop could become a mere “collection of assets” if it loses, and Boeing could then buy Northrop. Out of the three companies, only Northrop and Lockheed employ stealth design teams.
HASC Cuts $460M from LRSB FY 16 Budget
Meanwhile, the House version of the Fiscal Year 2016 National Defense Authorization Act, reported out of committee late this week, would slash $460 million from President Barack Obama’s $2 billion FY 2016 request for long-range strike capabilities in the unclassified portion of the LRSB budget. A Congressional staffer this week said that the House Armed Services Committee identified the potential reduction and the Air Force agreed with it. “We have a late contract award in FY 15 that is delaying the execution of funds in FY 16,” the staffer wrote. “That is the basis of the cut.”
When asked this week how the funding delay would impact LRSB procurement, a top Air Force official responded vaguely but signaled the service’s ongoing support for LRSB as a top-three program for the service. “Our support for the long range strike-bomber hasn’t wavered,” Lt. Gen. Stephen Hoog, Air Force Assistant Vice Chief of Staff and Director of Air Staff said during a speech this week. Previously expected to award the contract sometime this spring, the Air Force earlier this year announced a summer timeframe for the award.
More Congressional Oversight for LRSB Program?
During a markup hearing on the defense policy bill, HASC approved language proposed by Rep. Jackie Speier (D-Calif.) that would increase Congressional oversight of the LRSB program. The amendment would require the U.S. Comptroller General to conduct a review comparing LRSB’s technology maturity with other Air Force acquisition programs at parallel points in procurement cycles.
