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News Analysis : It Was More Than Its Plane That Won Pact for Lockheed


Nonetheless, Northrop was indicted on some of the most serious charges ever leveled on a defense contractor: falsifying tests on a nuclear weapon guidance system. It also lost the contract to produce the MX missile guidance system, after years of delays in delivering the units to the Air Force. Its problems on the Tacit Rainbow missile led to the Air Force dropping the project.

"Some people don't understand that Northrop's credibility on Capitol Hill is on empty right now," said a staff member of the House Energy and Commerce Committee, which has led the assault on the firm. "Their efforts to portray the company as a new and improved Northrop did not sell."

Rep. John Conyers (D-Mich.), whose House Government Operations Committee held an acrimonious hearing on Northrop last year, said Wednesday that the firm's record could not be ignored.

"I don't know how the Air Force decided which contractors would build the ATF, but I can only assume that there was some long-overdue consideration of Northrop's dismal track record of test fraud, contract suspension and fines."

In terms of cost, Rice said the price tag on Lockheed's proposal was clearly lower than Northrop's, though he declined to disclose the two firms' bids.

If employment levels on the program are any indicator, Lockheed's bid was substantially lower.

Lockheed Chairman Tellep said his firm, along with partners General Dynamics and Boeing, will employ about 6,500 workers in the $14-billion development phase of the program. By comparison, Northrop Chairman Kresa said his firm alone would employ 6,000 workers on the development phase, not including the additional thousands that its partner, McDonnell Douglas, would have hired.

Asked about the disparity, Northrop officials questioned whether the figures were directly comparable and said they could not immediately reconcile the difference.

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