Sections

ideals
Business Essentials for Professionals



Markets
09/03/2016

Pratt & Whitney to build engine for Northrop’s new long range B21 bombers


United Technologies’ Pratt & Whitney to build engine for Northrop Grummn’s new long range bomber, which the USAF wants to deploy in the mid-2020s.



The U.S. Air Force has named Pratt & Whitney as the engine manufacturer for Northrop Grumman Corp’s new long range strike bomber. Additionally it has also defended the "cost plus incentive fee" included in the contract, which has been challenged by U.S. lawmakers.
 
Amidst calls for more transparency in the classified weapons program, U.S. Air Force Secretary Deborah James went on to reveal Pratt & Whitney, a unit of United Technologies Corp, along with key suppliers at a Pentagon new conference.
 
The other key suppliers for the new B-21 bomber includes the U.S. units of two British suppliers, GKN Plc and BAE Systems Plc, as well as Janicki Industries, Spirit AeroSystems Holdings Inc., Rockwell Collins Inc., and Orbital ATK Inc.
 
Last month, Lockheed Martin and Boeing stopped their challenge of Northrop who won the multi-billion dollar contract for the new bomber in October.
 
Without giving any details, James has disclosed the suppliers would work on the mission systems and on the airframe of the new B21 long range bomber.
 
Lieutenant General Arnold Bunch, the Air Force's top military acquisition official, did not divulge the location wherein Northrop would assemble components and build the bomber. He only said that in time the Air Force hopes to provide the value of the bomber development contract and associated incentive fees.
 
He clarified that the incentive fees were based on performance and cost criteria with an emphasis on meeting operational deadlines of having the plane combat ready from the mid 2020s.
 
The Air Force has estimated that it would take at least $23.5 billion to develop the new long range bomber. It has not disclosed the terms of its contract with Northrop. However, going by analyst’s estimates the contact figure is likely to hover around $80 billion, which includes the supply of components over a set period of time.
 
James clarified that the Air Force was in the process of replying to a couple of concerns raised by John McCain, Chairman of the Senate Armed Services Committee regarding the Northrop contract. McCain questions relate to potential increase in cost overruns which will leave the U.S. Government with significant liabilities.
 
James said if McCain were to succeed in blocking the deal, it would take "money and time" to cancel and redo the deal.
 
McCain has argued back saying a fixed price contract had proved beneficial to the U.S. Government and had saved it $1 billion in cost overruns in a contract with Boeing which manufactured a new refueling plane under a fixed price contract.
 
However Lieutenant General Arnold Bunch said in this particular instance the contract were dissimilar since the Northrop contract is to build a totally new airplane and that the company does not have any potential commercial or foreign military sales customers to help it defray its costs.
 
 


Debashish Mukherjee

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc