(CNN) The Pentagon took a major step toward upgrading its aging bomber fleet Tuesday, awarding the long-awaited contract to build the new Long Range Strike Bomber to Northrop Grumman.
Calling the Long Range Strike Bomber the "back bone" of the Air Force's future strike and deterrence capabilities, Defense Secretary Ashton Carter said the new aircraft allows the U.S. to "project power across the globe now and into the future."
"The age of our bomber fleet requires new thinking and new capabilities," Carter said. "Building this bomber is a strategic investment for the next 50 years."
Officials have been tight-lipped as to the specific capability expectations for the LRS-B, but indications are that it will be stealth, able to carry conventional and nuclear weapons and could possibly operate both with and without a pilot.
Air Force Secretary Deborah Lee James said the new long-range bomber will have the ability to launch from the U.S. and strike any target around the globe to counter advancements in air defense systems by rival nations and emerging threats posed by potential adversaries.
Northrop Grumman, the developer of the Air Force's current bomber, the B-2, beat out a partnership between aeronautic juggernauts Boeing and Lockheed Martin for the right to build the next generation of long-range aircraft.
"The Air Force has made the right decision for our nation's security," said Wes Bush, chairman, CEO and president of Northrop Grumman, in a statement. "As the company that developed and delivered the B-2 Spirit stealth bomber, we look forward to providing the Air Force with a highly-capable and affordable next-generation Long-Range Strike Bomber."
Along with the F-35 Joint Strike Fighter and the KC-46 tanker, the LRS-B is one of the Air Force's top modernization priorities.
"We face a complex security environment," Air Force Secretary Deborah Lee James said during the Pentagon briefing announcing the contract Tuesday. "It's imperative our Air Force invests in the right people, technology, capability and training to defend the nation and its interests -- at an affordable cost."
The Pentagon says the LRS-B contract is divided into two parts in an effort to ensure contractors stay on schedule and within the boundaries of designated cost estimates.
The first part of the contract covers the engineering and manufacturing development phase of the aircraft and includes incentives to minimize the contractor's profit if it does not control costs and stay on schedule.
Engineering and development costs are estimated at $21.4 billion (in 2010 dollars) over the entire life of the program.
The second part of the contract covers the costs that go into building each of 100 aircraft projected as part of the program.
According to the estimates outlined in the contract, each long-range bomber will cost $511 million (in 2010 dollars), meeting the $550 million threshold set by the Pentagon.
Based on current independent estimates, the Air Force projects the cost of the program to be approximately a third of the previous B-2 stealth aircraft.
More recent programs to upgrade stealth air capabilities, including the F-35 Joint Strike Fighter, have been plagued by schedule delays, technology glitches and cost overruns.
"We have committed to the American people to provide security in the skies, balanced by our responsibility to affordably use taxpayer dollars in doing so," said Gen. Mark A. Welsh III, Air Force chief of staff.
"This program delivers both while ensuring we are poised to face emerging threats in an uncertain future," he said.
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