Northrop Grumman Wins Bomber Contract

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Key Takeaways:

  • The Air Force awarded a $55 billion contract to Northrop Grumman for its new long-range stealth bomber program, with the first 21 aircraft costing $1 billion each.
  • Northrop Grumman, builder of the B-2, was seen to have an advantage due to its previous experience and smaller size, potentially preventing a duopoly among larger defense contractors.
  • The new bombers are significantly expensive, though the per-unit cost for the initial batch ($1 billion) is less than the $2 billion cost of the current B-2 fleet.
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The Air Force will pay $1 billion each for the first 21 of its new long-range stealth bombers under a deal announced Tuesday. The Air Force awarded the $55-billion-dollar overall contract to Northrop Grumman, which built the B-2 and is said to be planning a similar-looking aircraft as its replacement. For the first 21 airplanes, Northrop Grumman will be paid $21.4 billion. Lockheed Martin and Boeing put in a joint bid.

Most commentators agree that Northrop Grumman had a leg up in the competition on two fronts. It built the B-2, which the Air Force seems to have been pleased with, and it’s a lot smaller than Boeing and Lockheed Martin. Some believe the win for Northrop Grumman was intended to prevent the other two main defense contractors from creating a duopoly. Regardless of the intrigue, Northrop Grumman now has some targets to meet for its breathtakingly expensive airplanes. Still, it’s worth noting that the current fleet of about 20 B-2s cost $2 billion each. One B-2 was lost in an accident on Guam in 2008.

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