By Valerie Insinna and David B. Larter
While the specific reasoning underpinning the decision was not fully explained, it appears the Navy’s final request for proposals — released earlier this month — raised questions among executives who worried that Northrop would be unable to develop a UAV that met specifications and still delivered profit for the company.
“When we’re looking at one of these opportunities, let me be clear: Our objective is not just to win. Winning is great, it feels good on the day of an announcement, but if you can’t really execute on it and deliver on it to your customer and your shareholders, then you’ve done the wrong thing,” Northrop head Wes Bush said during an Oct. 25 earnings call.
“And we’ve worked hard over a long number of years in our company to have great clarity around what our objectives are,” he said. “When you’re entrusted by the U.S. or any one of our allied nations to do something in the defense arena, that’s a bond of trust that you can’t afford to break, and we really look hard at executability under the terms of RFPs that come out to make sure that we can execute.”
Later in the call, Bush said that “the particular nature of that final RFP,” or request for proposals, triggered Northrop to withdraw from the competition, but did not further clarify what parts of the solicitation raised eyebrows.
Financial analysts on the call quickly picked up that this is the third “no-bid” by Northrop this year for a major defense acquisition program, after earlier decisions to abstain from the Air Force’s T-X training aircraft competition — which saw the company developing and flying a prototype aircraft — and the Long-Range Standoff Weapon. (ends)
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