Boeing Drops Out of Giant Pentagon Program --Update
25 Juillet 2019 - 2:46PM
Dow Jones News
By Doug Cameron
Boeing Co. said it wouldn't bid on a giant program to replace
the nation's land-based nuclear missiles, a potential opportunity
valued at more than $60 billion.
The move would leave Northrop Grumman Corp. as the sole bidder
for the first phase of the Ground Based Strategic Deterrent program
to provide new ICBMs, with the Pentagon due to make an award in the
second half of next year.
Boeing's decision came just hours after Chief Executive Dennis
Muilenburg had touted its capabilities as a bidder on Boeing's
quarterly earnings call.
The company has privately expressed concerns for years that the
huge program would become a "cost shootout" between contractors
that wouldn't give it credit for its technical capabilities.
"After numerous attempts to resolve concerns within the
procurement process, Boeing has informed the Air Force that it will
not bid Ground Based Strategic Deterrent Engineering and
Manufacturing Development under the current acquisition approach,"
the company said in a statement.
"We've evaluated these issues extensively, and determined that
the current acquisition approach does not provide a level playing
field for fair competition."
The Pentagon said last week that the initial contract, valued at
$11 billion, would be awarded to the company that provides "the
best overall value."
While Boeing succeeded in winning three big Pentagon
competitions last year, including an Air Force training jet and a
Navy drone, it was the only one of the big defense companies to
report a drop in order backlog during the June quarter.
"We are focused on leveraging our work to date on GBSD to
deliver this essential national security capability," Mr.
Muilenburg said on Wednesday's earnings call.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
July 25, 2019 08:31 ET (12:31 GMT)
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