Aviation: The High Cost of Competition

It is not every day, or every year, that a company gets a $2 billion contract in one swoop. Last week California's Lockheed Aircraft did—for construction of the world's largest transport plane, the C-5A. After months of deliberating over three proposals, the Defense Department gave the nod to Lockheed, whose bid for building 58 of the planes was lower by $250 million than the next lowest bid. Lockheed thus nosed out two tough competitors—Boeing and Douglas—to snare the aerospace industry's prize of the year. It will deliver the first C-5A in 1969,...