GAO Denies Boeing-Lockheed Team's Protest of Northrop Air Force Bomber Contract

The Government Accountability Office has denied the Boeing (NYSE: BA)-Lockheed Martin (NYSE: LMT) team’s protest of the U.S. Air Force‘s award of the highly-classified Long Range Strike Bomber contract to Northrop Grumman (NYSE: NOC) in a ruling that could give way for engineering and development work to start.

Boeing and Lockheed hold an option to continue their challenge of the LRS-B contract in U.S. Federal Claims Court, as the latter company has done for the Army‘s selection of Oshkosh to build the Humvee vehicle replacement.

The Air Force announced Northrop as the LRS-B awardee Oct. 27, then the company paused its work on the bomber Nov. 6 upon the Boeing-Lockheed team’s submission of its protest to GAO.

“GAO reviewed the challenges to the selection decision raised by Boeing and has found no basis to sustain or uphold the protest, ” GAO wrote in its ruling.

“In denying Boeing™s protest, GAO concluded that the technical evaluation, and the evaluation of costs, was reasonable, consistent with the terms of the solicitation, and in accordance with procurement laws and regulations.”

Boeing and Lockheed subsequently said in a joint statement they will review GAO’s decision and decide on its “next steps with regard to the protest in the coming days.”

The Air Force could purchase up to 100 bombers over the lifespan of the contract, which has a value of between $50 billion and $80 billion.

Shares in Northrop rose 1.65 percent as of 1 p.m. Eastern, while Boeing’s and Lockheed’s stock were respectively up 3.24 and 0.97 percent.

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