Northrop Gets Two Big Sustainment Contracts

by: Matthew Potter
August 27, 2009

Category: Boeing, Business Line, Companies, Contract Awards, Department of Defense, Events, logistics, Military Aviation, Northrop Grumman Corp., Services, U.S. Air Force, U.S. Navy | RSS 2.0

Like Boeing recently winning a billion dollar support contract from the Air Force for the C-17 fleet Northrop Grumman received two large sustainment contracts yesterday. One each from the Air Force and the Navy. This kind of work certainly represents a good revenue stream for the contractors developing and producing large systems.

The first is for sustainment and maintenance of the B-2 fleet. This contract may be worth up to $3.4 billion over the next several years. The twenty aircraft fleet requires substantial support due to the complicated nature of the materials that it is made out of. The B-2 has been active in the former Global War on Terrorism as it does carry a large payload of conventional weapons.

The second contract is to refuel and refurbish the U.S.S. Theodore Roosevelt (CVN-71). This was the third Nimitz class carrier to be built. This contract has a value of over $2.4 billion and will cover a three year period of work. This is a one time maintenance action that is expected to continue the life of the ship out 2036. As part of the contract Northrop Grumman at Newport News shipyard will upgrade a whole host of systems and improve the capability of the ship overall.

These types of contract are very valuable to a company as they provide a steady stream of income over several years. The major cost of a modern weapon system is not the development or procurement but the sustainment over the very long life that are exhibited today. The United States for example is flying fifty year old B-52 aircraft and driving twenty-five year old M1 tanks. Both systems have received constant maintenance and upgrades over the years keeping them relevant to the modern war fight.

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