General Dynamics Offers Cheaper F-16C
General Dynamics, responding to a recent bid by Northrop to sell the Air Force its F-20 fighter, said Thursday that it will offer the military a stripped-down version of its F-16C fighter for $2 million a plane less than its competitor.
The move intensified the competition among the nation’s defense contractors for Pentagon purchases at a time when a number of contractors face sharp criticism that they have grossly overcharged taxpayers.
Besides countering Northrop’s offer, one General Dynamics official said that the unprecedented, unsolicited bid to sell the Air Force a “specially configured” F-16C is an effort to meet broader constraints on federal spending.
Budget Pressures Cited
“Recent budget pressures and apparent government willingness to consider alternative fighter configurations” gave General Dynamics the incentive to make the offer, said Herbert F. Rogers, vice president and general manager of General Dynamics’ Fort Worth division.
General Dynamics said the so-called “flyaway cost” of the modified F-16Cs--with no equipment spares or support--would be $9.7 million each, contrasted with $12 million for the current fully equipped fighter. The stripped-down plane would eliminate some of the radar and other sophisticated equipment on the current model.
The fiscal 1986 Pentagon budget currently before Congress includes an Air Force plan to buy 792 of the F-16Cs over four years. If the Air Force accepts a new proposal to buy 504 fully equipped F-16Cs and 216 of the modified fighters, the overall program savings would total $1.4 billion, General Dynamics officials said Thursday.
Northrop, meanwhile, estimates the flyaway price for its F-20s at $11.7 million each. In April, the Hawthorne-based company made its own unsolicited offer to sell the Air Force 396 F-20s.
‘A Competitive Situation’
“There is now a competitive situation which the Air Force can take advantage of on a continuous basis,” Northrop spokesman Les Daly said. Noting that Northrop’s F-20 “is reputed to be the fastest interceptor in the world,” he declared, “in less than 100 days, it shot down the price of the F-16C.”
The Air Force is also considering buying 20 of the Northrop fighters in its procurement plans for fiscal 1987 to 1991. Northrop said it needs orders for 300 F-20s before it can actually begin production.
General Dynamics’ new bid was presented Wednesday to Air Force Secretary Verne Orr by the company’s vice chairman, Stanley C. Pace. In a statement Thursday, Orr called the proposal “a healthy initiative.”
Paul H. Nisbit, a financial analyst with Prudential Bache Securities in New York, noted that it is in General Dynamics’ long-term interest to prevent Northrop from putting the F-20 into production.
“They are very capable of playing hardball, and that is what they have done,” he said.
