Boeing has dropped its bid July 25 for a Pentagon contract potentially worth $85 billion, over concerns it said it had with the bidding process.
“After numerous attempts to resolve concerns within the procurement process, Boeing has informed the Air Force that it will not bid for 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.”
Boeing’s withdrawal from the race leaves Northrop Grumman as the only remaining contender for the contract to replace the nation’s land-based intercontinental ballistic missiles known as the Minuteman III.
Boeing Defense CEO Leanne Caret detailed the company’s issues with the procurement process in a July 23 letter to Will Roper, Air Force acquisition executive.
“Throughout the procurement process, Boeing has been transparent with the Air Force about its concerns with the competition,” she wrote. “The final RFP released on July 16 made only modest changes to the draft RFPs that had been previously released. As relevant to the concerns Boeing had raised, the final RFP extended the proposal submission deadline by 60 days, from 90 days after the RFP’s issuance to 150 days, and allowed offerors to submit ‘an alternative proposal in addition to their principal proposal,’ that could include ‘a single, combined proposal’ from both competitors.”
But Caret said that those changes did not address Boeing’s primary concern: that Northrop Grumman would have an unfair advantage in the competition due to its recent acquisition of solid rocket motor manufacturer Orbital ATK, now known as Northrop Grumman Innovation Systems.
NGIS is one of two U.S. manufacturers of solid rocket motors, alongside Aerojet Rocketdyne, but both Boeing and Northrop had chosen Orbital as its supplier for GBSD prior to the merger.
According to Caret, Northrop only recently — as of July 3 — signed off on an agreement that would firewall Boeing’s proprietary information from Northrop’s own GBSD team as Boeing negotiates with NGIS for solid rocket motors. Even though an agreement has now been reached, Caret contends that Boeing does not have enough time to negotiate a competitive price for the motors.
Caret said the current acquisition approach gives Northrop “inherently unfair cost, resource and integration advantages related to SRMs,” adding: “As I said in my July 8 letter, we lack confidence in the fairness of any procurement that does not correct this basic imbalance between competitors.”
Even the Air Force’s accommodation that would allow Northrop and Boeing to submit a joint bid “is not a workable solution to these issues,” she said.
“Because the final RFP does not address Northrop’s inherent advantage as a result of its control of SRMs, Northrop retains the ability to compete on unequal terms against either a Boeing or a joint ‘alternative’ proposal — and as a result, would not be incentivized to devote the significant resources required to develop such a proposal,” Caret said.