Northrop CFO: 'We're answering the call' for more R&D spending

Northrop Grumman is increasing its research and development spending as the Pentagon is asking the defense industry to do more, the contractor's chief financial officer said today.

Speaking at a Citi conference in Boston, Ken Bedingfield said Northrop has long prioritized this type of spending, even when the Defense Department was awarding contracts using the lowest-priced, technically acceptable approach.

"There's been an ask by the department that the industry invest more in R&D," he said. "We're answering the call, we're investing additional R&D and -- quite frankly -- we've been an investor in R&D."

Asked about the Pentagon's outreach to Silicon Valley, Bedingfield said he sees that working as a partnership between the California-based companies and the traditional defense contractors.

"I think, as a defense industry, we've tended to stay ahead of Silicon Valley in terms of those technologies that are relevant to the security of our nation," he said, noting the importance of differentiating U.S. technology from that of other countries. "Inherently, commercial technology is hard to differentiate because any other country can acquire that technology. . . . To the extent the DOD identifies technologies in Silicon Valley, we would be interested in helping to integrate that into something that's differentiated for that use."