Boeing nears decision on protest of U.S. bomber award to Northrop

Wed Nov 4, 2015 7:47pm EST
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By Andrea Shalal

WASHINGTON (Reuters) - Boeing Co (BA.N: Quote) may decide as soon as Thursday whether to protest the U.S. Air Force's selection of Northrop Grumman Corp (NOC.N: Quote) to develop and build a next-generation long-range strike bomber amid signs that a challenge could be an uphill battle, according to sources familiar with the issue.

Boeing spokesman Todd Blecher said the company had not yet decided whether to challenge the contract award, which could be worth $80 billion to the winning bidder over the next decades. "We continue to evaluate our options," he said.

Boeing, which had teamed with Lockheed Martin Corp (LMT.N: Quote), has agonized over the decision since receiving a briefing from the U.S. Air Force on Friday, according to sources familiar with the issue, who said company executives were stunned by the loss.

The stakes were high, but neither Boeing nor Lockheed were willing to proceed with a protest if their case looked weak, for fear of annoying the Pentagon and the Air Force, according to two sources familiar with the issue.

A protest would also delay work on the new warplane that U.S. Air Force officials say they need to start replacing the current aging fleets of B-1 and B-52 bombers, the sources said.

The Air Force last week selected Northrop to develop and build the new bomber.

Boeing and Lockheed immediately said they wanted answers on how the competition was scored with regard to price and risk.

Under federal law, companies have 10 days after an agency debrief to file with the U.S. Government Accountability Office, an arm of Congress that rules on federal contract protests. In order to trigger a stop-work order, protests must be filed within five days of a required briefing, according to the GAO.   Continued...

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013.  REUTERS/Jim Young