Northrop Grumman Leader Warns On Move To Fixed-Price Contracts.

Publication: Government Procurement Report

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COPYRIGHT 2006 Access Intelligence, LLC.

Lawmakers and Pentagon leaders should avoid any headlong rush to impose fixed-price contracts on the aerospace industry, according to a top defense executive.

Using fixed-price contracting for some risky development programs might dissuade some companies from bidding on the work for fear of losing money, Ronald Sugar, chairman and CEO of Northrop Grumman [NOC], the third-largest defense contractor, said last week.

He also said he sees no impending huge collapse in defense spending, though he cautioned that projecting military outlays years in advance is difficult, adding that Northrop Grumman isn't highly dependent on funding from supplemental budgets that may be reduced in coming years.

And, he said that Northrop Grumman, while it is concentrating heavily on information technology and systems, still likes its military hardware programs. "It turns out platforms are good for you if you have good platforms," he said.

Speaking before a Bear Stearns aerospace and defense investors conference, which Northrop Grumman webcast,...

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