Friday, April 15, 2016

Northrop's Mystery Bomber Bid May Trigger Review

Northrop Grumman Corp.’s winning bid to develop and build the U.S. military’s next-generation bomber was “substantially below” independent Pentagon and Air Force agency estimates, so Congress may seek to review their methodologies, according to a Congressional Research Service assessment.
Despite a request from Senator John McCain, the Air Force has refused to release the winning contract amount. It did, however, reduce its latest five-year bomber budget by $3.5 billion, citing the lower bid. The Air Force and Pentagon’s in-house independent cost assessment agencies estimated a $23.5 billion development phase, that includes the Northrop contract, plus $56 billion on procurement -- or about $564 million for each bomber in 2016 dollars.
Defense committees may want to review the independent cost estimating “to understand why the estimated cost was significantly higher than the actual bid,” it said. In addition, Congress may “wish to use its oversight mechanisms to verify that the contract can be executed at the price bid” because “some contractors have been accused of bidding unrealistically low prices to win a given contract, then using their incumbency to appeal for higher appropriations.” more