Editor's note: This has been updated with the latest information that Lockheed Martin would not be taking additional legal action
Lockheed Martin won't pursue additional legal action following a ruling by the Government Accountability Office this month denying its protest of the Army's Future Long-Range Assault Aircraft award to a competitor.
The Army selected Bell, owned by Textron, in December, to produce its V-280 Valor aircraft, which will gradually replace the UH-60 Black Hawk. Sikorsky, owned by Lockheed Martin, then filed a bid protest with the GAO, that was denied earlier this month.
GAO’s redacted copy of the protest decision shows that Sikorsky’s DEFIANT X proposal was $4.45 billion, compared with Bell’s, which was just over $8 billion.
The Army ultimately selected the V-280 in spite of the cost difference, for reasons related to the engineering and design of each proposal.
Lockheed Martin announced Tuesday afternoon that the company had decided not to pursue any additional legal action.
“We are disappointed with the Government Accountability Office decision and remain convinced that our DEFIANT X offering represented both the best value for the taxpayer and the transformational technology that our warfighters need to execute their complex missions. We value our long-standing partnership with the U.S. Army, and serving their missions remains our top priority,” the company said in the statement.
The company added that it is focusing on developing the RAIDER X, which is its proposal for the Army’s Future Attack Reconnaissance Aircraft, as well as modernized Black Hawks and other future technologies.
Lockheed’s chief financial officer said during a 2023 first quarter earnings call Tuesday that the Future Long-Range Assault Aircraft bid from Sikorsky was competitive, despite losing out to rival bidder Bell.
During Tuesday’s earnings call, an investor mentioned the cost difference between Bell and Sikorsky’s proposals, and asked executives what they can say to investors to assure them that “the bid process is consistent with generating adequate returns on new work?”
Lockheed CFO Jay Malave said Sikorsky’s FLRAA proposals featured “aggressive pricing” but there were efficiencies built in that “significantly improved” cost competitiveness.
“The business case itself was favorable, and that’s what enabled the pricing that we were able to offer. I think generally speaking, that’s how we evaluate these proposals,” he said.
Malave said the company looks at various metrics such as net present value, initial rate of return and current affordability, when making a business case.
“And so, we go through all of that as part of the management decision making,” he said. “The technology that we can provide, as you would expect, we have the leverage, we have the capability, the wherewithal to provide favorable pricing and outstanding technology offerings to our customer. We don’t do it at the expense of financial returns.”