You can’t put a price on freedom; or maybe you can ($598 billion per year). In other words, there’s nothing wrong with spending tax dollars to maintain American exceptionalism. While we may allocate more money to defense each year than the next 13 countries combined, and develop technologies decades ahead of our enemies’ capabilities, the costs associated with a predominantly Russian or Chinese global sphere of influence are far higher. Thus, in an attempt to keep America and her allies safe, mainly via air superiority, the US Air Force has announced its intent to offer aerospace firms, like Northrop Grumman (NOC), Lockheed Martin (LMT), and Boeing (BA), what will be the largest defense contract of this decade.
The Pentagon has reviewed America’s current long-range bomber fleet, comprised of B-1B, B-2, and B-52 aircraft, and has determined that current high maintenance costs can be offset by the development, implementation, and operation of a new long-range strike-bomber. While the military’s replacement designs have yet to be announced, the new bomber will ultimately replace America’s aging fleet of defense aircraft, which includes aircraft that date back to the Korean and Vietnam Conflicts. The unit cost of the new strategic bombers is projected to cost 75% less than America’s currently coveted B-2 stealth bombers (which sell for roughly $2 billion/plane).
While it remains unclear which defense company will submit the winning bid to build the Air Force’s new plane, Northrop Grumman, which was awarded the B-2 Spirit contract in 1989, appears to be the frontrunner. Just as it did during the late 1980s, Northrop Grumman will likely stick with what it knows best: stealth. If it can develop an efficient, light, high capacity aircraft, Northrop Grumman will surely win the long-range bomber contract. However, the company faces tough competition from Lockheed Martin, the aerospace juggernaut responsible for developing both the F-22 and F-35. In any case, the winning bidder will secure billions in upfront payments.
The Air Force plans to invest $20 billion into research and development of its new bomber. It has also set a maximum price limit of $550 million per aircraft. Altogether, the total cost of the new military contract could approach $80 billion.