Northrop and BAE drop out of T-X competition
In a surprise announcement on 1 February, Northrop Grumman and BAE Systems announced its withdrawal from the T-X program.
The announcement, issued jointly by the two companies, cuts the T-X competition to only two bidders, Boeing/Saab and Lockheed/KAI.
“Northrop Grumman and its principal teammate BAE Systems have carefully examined the U.S. Air Force’s T-X Trainer requirements and acquisition strategy as stated in the final request for proposals issued on Dec. 30, 2016. The companies have decided not to submit a proposal for the T-X Trainer program, as it would not be in the best interest of the companies and their shareholders. Northrop Grumman and BAE Systems remain fully committed to performing on current and future U.S. Air Force programs, to deliver critical capabilities to America’s airmen.”
The news came shortly after Northrop Grumman CEO Wes Bush stated that the two companies were reassessing the viability of the order from a business perspective.
With Northrop being the incumbent manufacturer of the current fleet of T-38 Talons, the decision took analysts by surprise. The company has been involved in the bidding process from it’s infancy. The U.S Air Force recently made it clear that a more cost effective solution that met the performance specifications outlined in the contract would certainly have an edge over it’s competition, which may have contributed to the decision.
Raytheon withdrew from the competition last week with it’s bid based on the Leonardo T-100. While Leonardo may still be committed to the competition, it is unlikely that the Italian manufacturer would be able to clinch the deal considering the strong competition posed by the remaining bidders.
With U.S President elect Donald Trump’s recent cost cutting crusade on the troubled F-35 program, it seems that a cost effective solution may be the only option for the remaining competitors.