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Spokeswoman Ann Stefanek: “The Air Force will proceed with an aggressive and effective sole-source negotiation.”
WASHINGTON — The U.S. Air Force confirmed Dec. 13 that Northrop Grumman is the only bidder for the Ground Based Strategic Deterrent program to develop a new intercontinental ballistic missile.
The Air Force only received one proposal in response to a solicitation for “GBSD engineering and manufacturing development and early production and deployment,” Air Force spokeswoman Ann Stefanek said in a statement. “The Air Force will proceed with an aggressive and effective sole-source negotiation. We remain on track for a contract award in the fourth quarter of Fiscal Year 2020.”
The GBSD is an estimated $63 billion 20-year program to replace more than 400 aging Minuteman 3 intercontinental ballistic missiles. It was expected to be a two-horse race between Northrop Grumman and Boeing. But Boeing decided to drop out after it concluded that Northrop Grumman’s grip on the solid rocket motors market would give it an overwhelming pricing advantage it could not compete against.
“Boeing is disappointed we were unable to submit a bid to the GBSD solicitation,” the company said in a statement Dec. 13.
Boeing had unsuccessfully pleaded with the Air Force to compel Northrop Grumman to form a “national team” and include Boeing it its bid. In its Dec. 13 statement, Boeing said it “continues to support a change in acquisition strategy that would bring the best of industry to this national priority.”
Congressional leaders like House Armed Services Committee Chairman Adam Smith (D-Wash.) have criticized the Air Force for allowing the GBSD program to become a sole-source award, predicting that it will result in higher than anticipated costs.
The bipartisan conference agreement for the National Defense Authorization Act for Fiscal Year 2020 directs the secretary of the Air Force to submit to the congressional defense committees a report “assessing the risks and costs resulting from receiving only one bid for that phase and plans to mitigate such risks and costs.” The report is due 60 days after awarding a contract.
The Air Force says it has analyzed the projected cost of the program during the earlier phase of GBSD when Boeing and Northrop Grumman were working on competing proposals. “The competitive technology maturation and risk reduction phase has provided the DoD with an unprecedented amount of technical and cost knowledge,” said Stefanek, the Air Force spokeswoman.
Hanging over the program is an investigative query by the Federal Trade Commission of Northrop Grumman’s June 2018 acquisition of Orbital ATK, which gave the company a hugely dominant position in the solid rocket motors market. Northrop Grumman CEO Kathy Warden confirmed the query during the third quarter earnings call Oct. 24.
“When Northrop Grumman acquired Orbital ATK it also acquired a structural advantage in pricing its GBSD offering,” industry consultant Loren Thompson, of the Lexington Institute, told SpaceNews. Boeing has argued that because of the acquisition of Orbital ATK, Northrop Grumman gained “anticompetitive and inherently unfair cost, resource and integration advantages related to solid rocket motors.” The company pointed out that solid rocket motors account for more than half the price of an ICBM.