Northrop Grumman (NYSE: NOC) has beaten out a team ofÂ Boeing (NYSE: BA) and Lockheed MartinÂ (NYSE: LMT)Â forÂ the highly-anticipated contract to build the U.S. Air Force‘s Long Range Strike Bomber plane, Defense DepartmentÂ officials announced Tuesday.
The service branchÂ plans to purchase up toÂ 100 of the bombers at a cost ofÂ $511 million per plane in 2010 dollars and $564 million per aircraft for 100 bombers in 2016 dollars, Air Force acquisition lead William LaPlante said atÂ the press conference to announce the contract.
LaPlante also said the program’s engineering, manufacturing and development phase will have a total cost of $21.4 billion in 2010 dollars and $23.54 billion in 2016 figures.
Lt. Gen. Arnold Bunch, military deputy to the Air Force’s acquisition assistant secretary, saidÂ BoeingÂ and LockheedÂ will receive aÂ debrief on the selection Friday and will have 10 days to file a protest with the Government Accountability Office.
Air Force officials eye initial operating capability for the bomber in the mid-2020s and wantÂ the planeÂ toÂ carryÂ nuclear andÂ conventional weapons.
This initial awardÂ includesÂ a cost-plus incentive feeÂ development contract and a fixed-price incentive fee agreement on the first five low-rate initial production lots for 21 bombers.
With this award, Northrop will receive a boost to its aerospace systems segment that saw revenue remain flat in its second quarter for 2015 compared to the same period last year.
Northrop will release its third quarter financial results Wednesday morning and itsÂ shares spiked 5.57 percent to $191.25 in post-market trading as of 5:40 p.m. Eastern time.
Air Force Secretary Deborah Lee JamesÂ said DoD brought in outside advisers to determine the LRSB program’s total costÂ and theÂ LRSB bomber willÂ eventually replace the service branch’s B-52 and B-1 bombers, which have been in the fleet for more than 50 and 70 years respectively.
Gen. Mark Welsh, Air Force chief of staff, said the service branch will take an open architecture approach for the bomber’s technology in the plane’s development process.
T-X program competitors include a team of BoeingÂ andÂ SaabÂ against a group of Lockheed andÂ Korea Aerospace Industries, as well as a consortium of Northrop with teammates BAE Systems and L-3 CommunicationsÂ (NYSE: LLL).
Italy-basedÂ Alenia Aermacchi is offering a variant of itsÂ M-346 Master fighter jet and a joint venture ofÂ TextronÂ (NYSE: TXT) and AirLand EnterprisesÂ is also competing.
BoeingÂ is pursuing JSTARS Recap with a modified version of itsÂ 737-700 commercial jet.
The Air Force awarded three contracts in August for JSTARS Recap’s pre-engineering, manufacturing and development phase to Boeing and the two contractor groups.