US officials rejected Tuesday a Boeing-led challenge to the Air Force’s award of a major contract to rival Northrop Grumman to supply next-generation bombers.
The Government Accountability Office “found no basis to sustain or uphold the protest” from Boeing and partner Lockheed Martin for a contract potentially worth some $80 billion, the agency said.
“In denying Boeing’s protest, GAO concluded that the technical evaluation, and the evaluation of costs, was reasonable, consistent with the terms of the solicitation, and in accordance with procurement laws and regulations,” the GAO said.
Boeing and Lockheed had filed the protest in November after the Air Force picked Northrop for a contract to engineer and build the new long-range strike bomber.
Boeing had argued that the Air Force’s method for evaluating costs of the bomber was “fundamentally flawed” and did not adequately recognize initiatives by the aerospace giant to save money on the contract.
The contract covers engineering and options for the first 21 aircraft. The Air Force has estimated the initial engineering and manufacturing phase as having a value of $21.4 billion, with some 100 aircraft costing $511 million per plane, GAO said.
Boeing said it was reviewing the GAO decision.
“We continue to believe that our offering represents the best solution for the Air Force and the nation, and that the government’s selection process was fundamentally and irreparably flawed,” Boeing said.
“We will carefully review the GAO’s decision and decide upon our next steps with regard to the protest in the coming days.”
The Chicago-based Boeing’s defense business has been hit by a lack of orders for its F/A-18 and F-15 fighter jets, whose production is scheduled to end in 2017 and 2020, respectively.