November 10, 2015 / 7:19 AM / in 2 years

U.S. Air Force defends bomber competition process

DUBAI (Reuters) - U.S. Air Force Secretary Deborah James defended on Tuesday the process that selected Northrop Grumman Corp NOC.N to build the next-generation U.S. bomber, saying it was “very deliberate” and included a number of independent reviews.

The corporate logo of Northrop Grumman is shown on a Fire Scout MQ-8 B unmanned helicopter during a ceremony at Naval Air Station North Island in Coronado, California, May 2, 2013. REUTERS/Mike Blake

James said the Air Force stood by its decision, announced last month. But she said it would wait to see how the U.S. Government Accountability Office (GAO)ruled on a formal protest filed against the decision by Boeing Co BA.N and Lockheed Martin Corp LMT.N.

The contract to build a long-range strike bomber is expected to be worth around $80 billion to the winner in coming decades. GAO is due to rule on the issue by Feb. 16, 2016.

“We had a very deliberate process. We took our time,” James said. “It was key that we do it correctly and we believe that we did do it correctly.”

James said the Air Force’s decision was subject to several reviews before being announced, including one carried out by the Department of Defense and a separate legal review.

Boeing and Lockheed, the Pentagon’s two largest suppliers who worked as a team on the bid, said last week they believed the Air Force process was “fundamentally flawed” and did not properly evaluate the relative or comparative risk of the competing bids.

They said they were concerned about the Air Force’s use of cost data from earlier bomber programs to assess the pricing of the planes, devaluing innovations and new manufacturing processes implemented in recent years, sources said at the time.

Analysts had widely expected that whoever lost out on the deal, either Boeing and Lockheed or Northrop, would protest the award, given its size and a dearth of other large-scale U.S. arms programs in coming years.

James told reporters that historical cost data was part of the process, but other factors also played a role. “It was more complex than that. It wasn’t that and that alone,” she said.

James said the decision was subject to a variety of peer reviews and was informed by several independent cost estimates.

“Independent cost estimators, particularly when you go to multiple sources .... they do have this pesky thing called data and facts on their side more often than not,” she said. “We’ll just have to see where the GAO comes out.”

Reporting by Andrea Shalal; Editing by Miral Fahmy and Susan Fenton

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