Northrop contract for U.S. patrol plane upheld

WASHINGTON (Reuters) - The U.S. Navy said it was proceeding with a $1.16 billion contract with Northrop Grumman Corp for an unmanned patrol plane after government auditors denied a protest filed by losing bidder Lockheed Martin Corp.

Navy Capt. Bob Dishman said on Monday the decision by the Government Accountability Office affirmed that the Navy had followed a rigorous process during the competition and had rightly chosen Northrop's RQ-4N Global Hawk as the best-value for the Broad Area Maritime Surveillance program.

Northrop's proposal was based on its high-altitude unmanned Global Hawk, which has been used extensively over Iraq and Afghanistan.

The Navy's initial contract is for design and development, but officials say the deal is worth at least $3.74 billion over time.

The nonpartisan GAO ruled in the case on Friday, but posted its decision on its website only on Monday. No further details about its ruling were immediately available, since the ruling is subject to a protective order.

Lockheed had based its proposal on the Predator aircraft, which is built by privately held General Atomics and has also been widely used in Iraq and Afghanistan.

Boeing, offered a plane based on the General Dynamics Corp Gulfstream G550 business jet, but decided not to protest.

Lockheed had protested the contract saying its offering was technically compliant and cost significantly less.

Sources familiar with the Navy contract award told Reuters in May that the Northrop patrol plane would cost $5.3 billion more to buy and operate than the smaller Lockheed plane.

Northrop spokesman Randy Belote said his company was aware of the Navy's decision, but had no further immediate comment.

Dishman, Navy program manager for unmanned aircraft systems, said the Navy was examining any impact the delay caused by the protest would have on the program, and remained committed to getting the new airplanes delivered "as expeditiously as possible."

The unmanned patrol planes will work in tandem with the Navy's P-8 airplanes, built by Boeing, to patrol ocean waters and relay reconnaissance information.

(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)