The Pentagon is set to announce its decision on a next-generation fighter jet contract initially worth more than $20 billion as soon as Friday, despite earlier concerns about budget constraints and shifting priorities, sources briefed on the plan said.
The Next Generation Air Dominance (NGAD) program will replace Lockheed Martin’s (LMT.N), opens new tab F-22 Raptor with a fighter built to battle alongside drones.
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Lockheed and Boeing (BA.N), opens new tab are competing head to head for the winner-take-all engineering and manufacturing development phase contract worth more than $20 billion.
An Air Force spokesperson and Boeing and Lockheed representatives did not immediately respond to requests for comment.
The winner of the high-stakes contest will receive hundreds of billions of dollars in orders over the contract’s lifetime, underpinning their businesses for decades.
NGAD was conceived as a "family of systems" centered around a sixth-generation fighter jet that aims to provide the United States with advanced air dominance capabilities to counter near-peer adversaries like China and Russia.
Under President Donald Trump’s administration, which took office in January, the program has moved forward after a period of uncertainty that cast doubt on the future of the next-generation fighter jet.
Last year, the program faced potential delays or scaling back due to budget pressures and cost overruns in other Air Force programs. There were also discussions about reconsidering fundamental design elements or shifting resources to unmanned drone programs.
The anticipated announcement signals designs that were finalized last year will be chosen for NGAD.
Boeing has suffered headwinds for both its commercial and defense businesses. A win would be a shot in the arm for its St. Louis, Missouri, fighter jet production businesses, while a loss would add to Boeing’s woes.
Lockheed was recently eliminated from the competition to build the Navy’s next-generation carrier-based stealth fighter. If it loses the NGAD contract, it will likely double down on its F-35 fighter jet program and international sales of its F-16 jets.
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