U.S. Air Force says Pratt to build engines for new bomber

By Andrea Shalal

WASHINGTON (Reuters) - The U.S. Air Force on Monday named Pratt & Whitney as the engine maker for the new Northrop Grumman Corp (NYSE: NOC) long-range strike bomber, and defended the plane's "cost plus incentive fee" contract that has been challenged by U.S. lawmakers.

U.S. Air Force Secretary Deborah James revealed the names of the engine maker, a unit of United Technologies Corp (NYSE: UTX) and other key suppliers at a Pentagon news conference amid growing calls for more transparency about the classified arms program.

Other key suppliers for the new B-21 bomber include the U.S. units of two British suppliers, BAE Systems Plc and GKN Plc , as well as Spirit AeroSystems Holdings Inc (NYSE: SPR), Orbital ATK Inc (NYSE: OA), Rockwell Collins Inc (NYSE: COL) and Janicki Industries, a family-owned company, James said.

Boeing Co (NYSE: BA) and Lockheed Martin Corp (NYSE: LMT) last month dropped their challenge to the multibillion-dollar bomber contract that Northrop won in October.

James said the suppliers named Monday would work on the airframe and mission systems of the new flying wing stealth bomber, but gave no details.

Lieutenant General Arnold Bunch, the Air Force's top military acquisition official, declined to say where Northrop would assemble the planes.

He said the Air Force hoped in time to provide the value of the bomber development contract and associated incentive fees.

He said the incentive fees were based on cost and performance, with an emphasis on meeting plans to start using the new planes in combat from the mid 2020s.

The Air Force initially estimated it would cost $23.5 billion to develop the new bomber, but has not released terms of its contract with Northrop. Analysts have said the overall deal could be worth $80 billion to Northrop and its suppliers over time.

James said the Air Force was working to address questions raised by Senate Armed Services Committee Chairman John McCain about the Northrop contract. McCain fears it could leave the U.S. government liable for potential cost increases.

She said it would take "money and time" to cancel and redo the deal if McCain succeeds in blocking it.

McCain says the Air Force has been spared from $1 billion in cost overruns on a new refueling plane being built by Boeing since that plane was developed under a fixed price contract.

But Bunch said this program was different since it involved a wholly new airplane, and the company had no potential commercial or foreign military sales customers to help defray its costs.

(Reporting by Andrea Shalal; Editing by Bill Rigby and Tom Brown)

You May Also Be Interested In

• B.Riley Resumes Taboola (TBLA) at Buy
• Moldova brings criminal case against pro-Russian Gagauzia leader to court
• Goldman Sachs taps BofA bankers for India dealmaking roles, sources say