Boeing bows out of multibillion-dollar Minuteman III replacement competition

WASHINGTON (Reuters) – Boeing Co (N:) has decided it will not compete as a prime contractor to replace the Pentagon’s aging U.S.-based Minuteman III missile system, paving the way for Northrop Grumman Corp (N:) to win a contract worth tens of billions of dollars.

Friday marked the deadline to submit proposals to continue work on the replacement of the nearly half-century-old intercontinental ballistic missile (ICBM) system as the military embarks on a costly modernization of its aging atomic weapons.

Boeing said in a statement that it was disappointed it was unable to submit a bid. Northrop did not immediately return a request for comment.

Boeing’s decision not to enter a bid as a prime contractor had been foreshadowed this summer in a letter from the chief executive of Boeing Defense Space and Security, Leanne Caret, to Air Force leadership, saying Northrop’s 2018 purchase of solid rocket motor maker Orbital ATK might make it difficult for Boeing to compete on cost.

Orbital is the top producer of the solid fuel rocket motors generally used in Minuteman III and similar missiles.

The Pentagon’s Cost Assessment and Program Evaluation office has said the total cost to replace Minuteman III could top U.S. $85 billion.

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