The U.S. Air Force’s decision to award the design and development of its next-generation stealth bomber to Northrop Grumman over a competing team led by Boeing and Lockheed Martin came down to the significantly lower price tag of Northrop’s bid, according to the U.S. Government Accountability Office (GAO).
Northrop’s proposed cost for the new bomber’s engineering, manufacturing and development (EMD) phase was “substantially lower” than Boeing’s due to “Northrop’s corporate investment decisions,” according to the GAO’s heavily redacted ruling on Boeing and Lockheed Martin’s protest of the 2015 contract award. Northrop’s lower EMD costs were driven by the decision to absorb significant company investment, as well as lower labor rates and labor escalation rates compared to Boeing’s, GAO wrote. The exact values of the bids were redacted.
http://aviationweek.com/defense/usaf-s-bomber-decision-came-down-cost?Issue=AW-05_20161026_AW-05_149&sfvc4enews=42&cl=article_1&utm_rid=CPEN1000000422550&utm_campaign=7452&utm_medium=email&elq2=1e936fa20dfc499caa2babf5ff4eb514Linl