When the U.S. Air Force awarded its contract for a new Long Range Strike Bomber (LRS-B) in late October, winner Northrop Grumman Corp. (NYSE: NOC) was expecting to build 80 to 100 of the new planes over the next decade or so. The contract has been estimated to be worth about $80 billion, but that total could nearly double if Congress agrees with the conclusions of a new study that claims the Air Force requires an advanced bomber fleet of 200 new planes.
The team led by Boeing Co. (NYSE: BA) and Lockheed Martin Corp. (NYSE: LMT) that lost the bidding war has protested the contract award to Northrop Grumman, and the new study raises the stakes even higher for the eventual winner.
The study was released Thursday by the Mitchell Institute for Aerospace Studies, an independent, nonpartisan policy research organization affiliated with the Air Force Association, itself a nonprofit, independent, professional military and aerospace education group.
According to Defense News, the study’s author, retired Lt. General Michael Moeller, wrote:
America desperately needs to rebuild its bomber force, starting with the [Long Range Strike Bomber] and then moving forward. 100 new bombers, the analysis finds, is not enough. … Limiting production of the new bomber, LRS-B, to 100 airframes would severely decrease the options available to national decision-makers during times of crisis or periods of instability. A modernized bomber force of 200 aircraft will sustain America’s asymmetric advantage in long-range precision strike for decades to come.
U.S. Senator Mike Rounds (R-SD) said:
Analysis has consistently shown the Air Force needs 150 to 200 combat ready bombers, a figure far beyond the less than 100 bombers currently available for operational missions, and far beyond the 80-100 bombers envisioned by the Defense Department for the future force. Is their calculus national security or is it budget driven? I personally am convinced that it is budget driven.
Another retired Air Force officer, Lt. General David Deptula, who was formerly the service’s deputy chief of staff for intelligence, surveillance and reconnaissance, has outlined the need for the Air Force to build 174 LRS-Bs, which comprises 12 planes for each of 10 combat squadrons, an additional 30 for training and testing, and 24 more in reserve.
The stakes for Northrop Grumman, Boeing and Lockheed just rose significantly. If an $80 billion contract is worth fighting over, a contract nearly double in size is even more worthy of a fight.