Some industry analysts are not buying the “opt out” declared by Northrop Grumman earlier this week, likening it to similar ones from both Boeing and Northrop in the original KC-X competition. Credit Suisse analyst Robert Spingarn reportedly stated in an industry note, “Northrop’s decision to abandon the tanker bid versus Boeing is merely a posturing move in our view.” However, others are taking the threat more seriously. Rep. John Murtha (D-Pa.), chairman of the defense appropriations panel, told reporters that Northrop’s revelation is a “blow to the program” and planned to talk with Pentagon acquisition chief Ash Carter, perhaps to revisit the split-buy approach he favors. (Northrop backers also recently cited interest in a split award.) Defense analyst Loren Thompson of the Lexington Institute blogs that Northrop’s Wes Bush “is quite willing to walk away.” (Also see Market Watch report; The Telegraph report; The Hill report; DOD Buzz report)
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.