The U.S. Government Accountability Office (GAO) rejected a protest by Boeing Co. and Lockheed Martin Corp. against the $80 billion contract awarded to Northrop Grumman Corp. to build the Air Force's next-generation heavy bomber.
Boeing and Lockheed, two of the United States' largest defense contractors, lost their bid to create the bomber against Northrop Grunmman, which was chosen by the Pentagon in October.
The two companies, which joined forces for the project, allege that the selection process was "fundamentally flawed." GAO said in its defense that the "the technical evaluation, and the evaluation of costs, was reasonable" and that bidding process followed procurement regulations, Reuters reported.
The project under dispute involves the production of 100 planes that is expected to enter service by 2020. This new generation of bombers is expected to replace Pentagon's current B-52 and B-1 fleet.
According to aerospace and defense analyst Jason Gursky, Northrop is expected to acquire $100 billion in sales over the next 20 years with the contract.
The heavy bomber in question is named the Long Range Strike Bomber. The program is highly classified, and will launch a fleet of stealthy aircrafts that are capable of carrying nuclear weapons to far-reaching enemy territories.
The Washington Post noted that the program has been branded as the Air Force's top acquisition priorities. Defense Secretary Ashton B. Carter described it as a "technological leap" that will ensure that U.S. dominance as a key player in global politics and military.
The GAO's decision to proceed with Northrop Grumman is a huge loss for Boeing. The company is currently laying off employees in its commercial division. It is also reportedly facing an investigation from the Securities and Exchange Commission over the alleged unusual accounting of the 747 and 787 jetliners which allowed the company to defer the production costs for the vessels.
Boeing officials said they might pursue an action in court as they remain firm that they offered the "best solution for the Air Force and the nation."
Northrop was also commissioned to build the B-2 warplanes in the 1980s.
