The U.S. Air Force is preparing to award an $85 billion program to develop and produce the nation's next-generation intercontinental ballistic missile (ICBM). Apparently, there will not be a competition, nor will there be a firm ceiling on how much money the contractor can spend to develop the missile. It will be a “cost-plus” contract.
This is not the kind of buying strategy you would expect from a military service that says it favors competition to discipline price and performance. The main reason federal agencies are typically allowed to make "sole-source" awards is because only one qualified offeror exists.
That is not the case here. There are, or were, two highly qualified offerors. But one of them, Boeing, says the competition to develop a new ICBM is so severely skewed in favor of its rival, Northrop Grumman, that there is no point in bidding.
We know Boeing (a contributor to my think tank) and Northrop Grumman are both highly qualified, because they have worked together to sustain the nation's existing Minuteman ICBM fleet for over half a century. Technical qualifications and experience have nothing to do with why Boeing is not bidding on a program it should have had a good chance of winning.
What went wrong for Boeing was the process. A series of inept moves by the federal government diminished the world's biggest aerospace company to the status of a sure loser, while conferring upon Northrop Grumman the prospective status of monopoly provider for not just one, but both parts of the strategic nuclear deterrent operated by the Air Force. (end of excerpt)
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