Northrop Scratch-Built a Jet to Bid on an Air Force Contract. Now It’s Dropping Out.

The Air Force’s T-X program aims to replace the aging T-38 Talon training jet. Here, a pair of two-seat T-38s sits at Base Operations at Minot Air Force Base, N.D.

Airman 1st Class J.T. Armstrong/U.S. Air Force

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The Air Force’s T-X program aims to replace the aging T-38 Talon training jet. Here, a pair of two-seat T-38s sits at Base Operations at Minot Air Force Base, N.D.

The decision leaves three, or maybe four, potential bidders on the 350-plane T-X program.

Northrop Grumman said it would not bid to build a pilot-training jet for the U.S. Air Force, despite spending more than four years quietly building a plane for the job. That leaves three potential bidders for the 350-aircraft, multibillion-dollar T-X program.

In a short statement, officials with Northrop and its partner BAE Systems said they made the decision after reviewing the Air Force’s parameters for the competition, issued in late December.

“The companies have decided not to submit a proposal for the T-X Trainer program, as it would not be in the best interest of the companies and their shareholders,” Northrop said in a statement.

That announcement was foreshadowed last week when Wes Bush — Northrop chairman, CEO and president — declined to commit to bidding to replace the Air Force’s decades-old T-38 Talon jets, also made by Northrop.

“We are presently assessing the terms presented by [the bidding parameters] to determine whether we see an appropriate business opportunity for us to submit a bid,” Bush said during a quarterly earnings call.

The departure is the latest shift in the bidding field. Last week, Raytheon and Italy’s Leonardo, broke off an agreement to partner on the project. Leonardo — which makes a version of its M-346 trainer for Italy, Israel, Poland and Singapore — has not said whether it would submit a solo bid.

Northrop’s withdrawal leaves three potential candidates: The Lockheed Martin-Korea Aerospace Industries T-50, a new plane being pitched by Boeing and Sweden’s Saab, and another new plane being offered by Sierra Nevada Corp. and Turkish Aerospace Industries.

The Air Force responded to the announcement with an emailed statement on Wednesday morning. “The Air Force continues to believe there will be a robust competition for [Advanced Pilot Training], a.k.a. T-X, and continues to look forward to the results of the on-going source selection,” wrote Ann Stefanek, a spokeswoman for the service.

Lockheed has test planes in South Carolina, where it says it will build the jets if it wins. Boeing has been flight-testing its plane in St. Louis.

So who’s the favorite?

“We see the narrowing field as favoring Boeing/Saab odds to win the program, though this will remain a hard-fought competition,” Byron Callan of Capital Alpha Partners wrote in a Wednesday note to investors after Northrop’s announcement.

Northrop and its subsidiary Scaled Composites had been quietly working on their plane at an airfield in the Mojave Desert since 2013. Company officials remained tight-lipped about activities related to the project, although aircraft spotters have posted pictures on social media of a small jet bearing the company’s logo.

And despite today’s announcement, Northrop’s CEO hinted last week that the T-X work was not done in vain. The firm’s investments “tend to have broader applicability,” Bush said.

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