Northrop Wins US Global Hawk Drone Contract Worth Up To $3.2B

WASHINGTON (Reuters) -- Northrop Grumman Corp has won a contract worth up to $3.2 billion for continued development, modernization and maintenance of all U.S. Air Force variants of the Global Hawk unmanned surveillance plane, the Pentagon said on Wednesday.

The umbrella contract will allow the Air Force to order parts and services as needed through Sept. 30, 2020, with all work to be completed by Sept. 30, 2025, the U.S. Defense Department said in its daily digest of major weapons contracts.

Northrop builds several variants of the high-altitude surveillance drone for the U.S. Air Force, and a maritime surveillance version for the U.S. Navy. Company officials were not immediately available to comment about the contract award.

A senior U.S. Air Force general this month said a new electro-optical sensor and other upgrades for the Global Hawk plane could cost as little as half the previous estimate of $4 billion. It not immediately clear if the contract announced Wednesday would encompass those upgrades.

The Air Force hopes to carry out the upgrades to the Global Hawk before it retires its aging fleet of manned U-2 spy planes built by Lockheed Martin Corp. It says it cannot afford two high-altitude surveillance aircraft.

The contract was awarded two years after the Air Force sought unsuccessfully to retire most of the Global Hawk planes, citing their high cost. U.S. lawmakers rebuffed that attempt, as well as the Air Force's bid in last year's budget to start retiring the U-2 fleet in fiscal 2017.

Air Force officials said they opted for Global Hawk given sharp declines in its operating costs.

(Reporting by Andrea Shalal; Editing by Lisa Shumaker and Christian Plumb)