New Northrop bomber to be designated B-21 -U.S. Air Force

An artist rendering shows the first image of a new Northrop Grumman Corp long-range bomber B21 in this image released on February 26, 2016. REUTERS/U.S. Air Force/Handout via Reuters

By Andrea Shalal

WASHINGTON (Reuters) - U.S. Air Force Secretary Deborah James on Friday unveiled the first image of a new Northrop Grumman Corp long-range bomber and said it would be designated the B-21, as losing bidder Boeing Co said it would forego further challenges.

James revealed the first artist's rendering of the secret bomber, an angular flying wing, at the Air Force Association's annual Air Warfare Symposium. She said the name of the new warplane would be chosen in a contest among service members.

The program has been shrouded in secrecy since its inception for fear of revealing military secrets to potential enemies, and to avoid giving the losing bidders any details before their formal protest was rejected last week.

Northrop won a contract worth an estimated $80 billion in October to develop and build 100 new bombers, but work on the plane was delayed for months while federal auditors reviewed a protest by Boeing and its key supplier, Lockheed Martin Corp.

Boeing said on Friday it would skip any further protests with the U.S. Government Accountability Office or in the federal courts. The Air Force, under pressure from lawmakers and retired Air Force officers, has promised to release more information about the new plane in March.

Although the program has now survived the legal protest process, it still faces hurdles in Congress.

Senate Armed Services Committee Chairman John McCain said on Thursday he would block the Air Force's use of a cost-plus type of contract for the long-range bomber since it would hold the government responsible for cost overruns.

The Air Force says that only the engineering and development phase of the program, valued at $21.4 billion, is structured as a cost-plus contract with incentive fees.

Production of the first five sets of new bombers, usually the most expensive planes in a new class of aircraft, would be structured with a firm, fixed price, the service said.

Analysts say the program will be worth around $80 billion in total, providing a boon to Northrop and its key suppliers, but the Air Force has said only that it expects to pay $511 million per plane in 2010 dollars.

John Michael Loh, a retired four-star U.S. Air Force general, has urged the Air Force to name Northrop's suppliers to shore up support in Congress, and avoid a rerun of the B-2 bomber program, which was scaled back from 132 planes to just 21, which drove the price of each plane sharply higher.

(Editing by Bernadette Baum and Matthew Lewis)