October 31, 2016

Northrop Grumman beat Boeing for B-21 on cost

Cost was the deciding factor in the US Air Force's (USAF's) decision to award Northrop Grumman a development contract for the B-21 Raider bomber aircraft, a USAF acquisition official confirmed on 26 October.
Both Northrop Grumman's and Boeing's bids for the work met technical requirements, Lieutenant General Arnold Bunch said during a conference sponsored by the Association of Unmanned Vehicle Systems International (AUVSI). "If we weren't comfortable that technically it could be done then we would have done something different," the general said. "But we felt comfortable with the technical approach of both, that they could both do it; then it comes down to the cost."
He was referring to information in a new Government Accountability Office (GAO) bomber protest decision report released on 25 October. According to the GAO document, Northrop Grumman's offering came in at a lower total weighted cost and total estimated cost.
"We set it up to make sure that they could meet the technical requirements, and if they could all meet the technical requirements, then we would look at the cost," Lt Gen Bunch explained.
Further, the air force budgeted to an independent cost estimate rather than to a contract value for the bomber programme, he said, because Congress directed the service to fund to an independent cost estimate and then to try to beat it.
Boeing, in its protest, alleged that Northrop Grumman could offer a lower bid because the latter used "unrealistically low labour rates" for inadequately skilled workers. However, the GAO wrote that it saw no evidence that the USAF had failed to account for technical risk, which use of such labour would imply.


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