Northrop Demoted in NASA Contract Bid

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Strained relations between Northrop Grumman Corp. and Boeing Co. over the loss of an $8.1 billion contract to build rockets for NASA has forced the Los Angeles contractor into a lesser role, the Wall Street Journal reported.


Northrop will have a secondary role when a reorganized Boeing-led team bids next month for a subcontractor roll on the Ares-I rocket, which could be worth hundreds of billions of dollars down the road, the Journal said.


The competition is to see who will be allowed to build the middle section of the rocket, which is expected to be NASA’s next-generation all-purpose rocket to launch a manned exploration vehicle as well as ferry astronauts. Proposals are slated to be submitted this spring.


The riff radically alters a partnership deal made between the contracting giants in 2004 which was said to cover all bids for NASA’s manned space-exploration efforts. The two companies suggested at the time that the partnership amounted to a marriage of equals.


The demotion is particularly significant for Northrop because the company doesn’t anticipate winning any larger-ticket contracts related to manned space ship projects in the near future, the Journal said.


Shares in Northrop were down 70 cents to $72.04 in afternoon trading Wednesday on the New York Stock Exchange.

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