Northrop Grumman Wins Bomber Contract

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Key Takeaways:

  • Northrop Grumman won a $55 billion contract from the Air Force to build 100 new long-range stealth bombers, beating a joint bid from Lockheed Martin and Boeing.
  • The initial 21 bombers are priced at $1 billion each, a substantial cost but notably less than the $2 billion per aircraft of the existing B-2 fleet.
  • Northrop Grumman's prior experience with the B-2 bomber and the Air Force's potential interest in preventing a duopoly among larger defense contractors were key factors in their successful bid.
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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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