Northrop Set to Escape Millions in Construction Costs for Missile Silos
- Congress, Air Force would let contractor pass along overruns
- Cost-plus contract puts onus on Air Force to absorb overruns
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Northrop Grumman Corp. may get help from Congress to avoid the risk it would have to absorb millions of dollars in cost overruns early in the estimated $8 billion construction of silos and launch centers for the US’s next-generation intercontinental ballistic missiles.
Pending defense policy bills approved by both House and Senate defense panels embrace an Air Force proposal to change the start of the project to “cost-plus” contracts that would give Northrop great latitude in what it bills the service for in early stages of the silo project. It’s an alternative to the standard requirement under federal law for “firm fixed-price” construction that require contractors to absorb overruns.