Northrop Receives Boost in Cost Ceiling for B-2 Bomber Modernization

PALMDALE, Calif. - Sept. 21, 2009 - The U.S. Air Force has raised the cost ceiling on Northrop Grumman Corporation's (NYSE:NOC) current contract for B-2 bomber modernization and sustainment activities from $6.1B to $9.54B. 

Northrop Grumman is the Air Force's prime contractor on the B-2, the flagship of the nation's long range strike arsenal.

The contract, which began in 1999 and runs through 2014, is actually a purchase agreement known as an indefinite delivery, indefinite quantity (ID/IQ) contract. It allows the Air Force to purchase B-2 related products and services from the company for a fixed period of time. The IDIQ contract covers all Northrop Grumman's activities on the B-2 program.

"This proactive approach by the Air Force to modify the B-2 contract helps ensure that the government/B-2 industry team can continue the critical modernization and sustainment activities that make the aircraft one of the most powerful, most survivable assets in the nation's defensive arsenal," said Dave Mazur, vice president and B-2 program manager for Northrop Grumman.

The cost ceiling of an ID/IQ contract represents the potential value of products and services that can be purchased under that agreement. Products and services are requested using individual delivery orders. The government is not required to spend up to the ceiling of the ID/IQ contract.

Under the current ID/IQ contract, the Air Force, Northrop Grumman and its subcontractors have undertaken a series of B-2 modernization programs that have improved the aircraft's operational readiness, its communications systems and its weapons delivery systems.

The B-2 is the only U.S. aircraft that combines stealth, long range, large payload and precision weapons in a single platform. The 20-aircraft fleet of B-2s is operated by the 509th Bomb Wing from its headquarters at Whiteman AFB, Mo.

Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.

• NorthropGrumman |
• contract |
• delivery |
• modernization |
• stealth

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