Will Northrop Grumman Corporation E-2D Advanced Hawkeye Nullify $80 Billion Bomber Halt News?
Published by Sam Hason on November 14, 2015 at 7:33 am EST
Northrop stock has been under pressure since its $80 billion order was halted due to Boeing and Lockheed protest
According to a Reuters report, Northrop Grumman Corporation's ( NYSE:NOC) forecasted E-2D Advanced Hawkeye airborne early warning aircraft will receive orders from North Africa, the Gulf and Asia in the near term. The company recently lost a UAE order, to SAAB AB, worth $1.27 billion, for surveillance systems up-gradation on bombardier planes. Northrop claims to have an order for four E-2D aircraft already placed by Japan.
$80 billion order under scrutiny On November 12, the company's $80 billion order of long-range strike bombers awarded on October 27 by the US Air Force was halted. The contract was protested by Lockheed Martin Corporation (NYSE:LMT) and Boeing Co (NYSE:BA) saying the selection process was fundamentally flawed.
100 aircraft were to be developed and manufactured under the deal. The government was expecting the first fleet to be incorporated in 2025. The need for radar evading aircraft arose due to the Pentagon’s effort to ready US military systems against potential aggression from China and Russia.
On November 6, Boeing and Lockheed filed an official protest against the deal, saying there were flaws in the Pentagon’s evaluation process, those that could derail the Defense Department’s extensive efforts to making weapons less expensive.
The US Government Accountability Office stated that the ruling on the protest will take place on February 16, 2016.
JP2068 Computer Network Defense contract received There was also positive news for the company, coming from its subsidiary, the “Northrop Grumman M5 Network Security,” which received a contract for the JP2068 Phase 2B.2 from the Australian Department of Defense.
This subsidiary is involved in providing cyber-security services to government organizations, military, and large-scale corporations. M5 also maintains a flourishing product development practice, which focuses on the Secure Communications System, and an array of cyber-secure products and capabilities.
The award for the JP2068 will enable effective management at the defense department’s, with monitoring, as well as the security of communication networks and information systems through its multi-phased project.
Northrop Grumman Australia chief executive Ian Irving said, "This contract marks the formalization of a partnership between Defense and Northrop Grumman Australia as a trusted cyber systems integrator with the ability to deliver enhanced cyber security to Defense."
Business Finance News believes despite Northrop's past, the company developed better aircraft. Naturally, before having allocated the second largest weapons program, the Department of Defense must carefully considered multiple factors due to sensitivity. The award also opened the Pentagon’s doors for Northrop, which should be seen as a positive sign in an environment where military spending has slowed. It is yet to be seen whether the company will adhere to the development agenda.