Boeing Moves Out From Biding On Air Force’s GBSD Program – Market News Updates
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Boeing Moves Out From Biding On Air Force’s GBSD Program

Boeing is bowing out of the GBSD program. This is an important component of the country’s nuclear triad, which costs around $85 billion. The company initially said it would be backing out because Northrop Grumman had the advantage, eliminating a level-playing field. Northrop is extremely dominant in rocket motors market.

Leanne Caret stated that she was disappointed Boeing’s concerns weren’t taken seriously, leading to the company’s exit. Northrop controls Orbital ATK, which supplies solid rocket motors. Pentagon had flagged this as a concerning fact during its presentation to Congress. Since all SRMs for space launch and ICBMs were produced by the company Orbital ATK, Northrop possessed a distinct advantage.

Northrop now has a price advantage, since it controls supply of rocket motors, which was why Boeing pulled out. Since only 1 bidder was left now, the US Air Force now has to reconsider its strategy.

Orbital ATK’s acquisition terms require Northrop to supply motors to its competitors on non-discriminatory terms when Northrop is bidding for a project as well. Firewalls also have to be installed to prevent any harm to competition.

However, Boeing didn’t agree. It asked the US Air Force to purchase these motors and supply them to both companies equally. However, they rejected this proposal. It isn’t yet clear whether Aerojet Rocketdyne can provide a viable alternative. Its future will be decided by whether the US Air Force will need their rockets to be used by Northrop to create level playing fields for all.

Aerojet Rocketdyne’s CEO stated that the company was still active in the market. While it doesn’t have ample capacity now, it would be able to meet future GBSD needs, he said.

Congress and experts have equally condemned the US Air Force for the way the whole process was handled.  They said that Northrop could turn into a monopoly due to Boeing’s withdrawal, resulting in higher costs to the government.

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