B-21 Comes with a Stealth Final Price TagTweet
April 7, 2016
The recently announced Long Range Strike Bomber (LRS-B or B-21) is moving forward with one hidden feature that doesn’t make a lot of sense—its actual price tag. Despite requests by Senate Armed Services Committee Chairman John McCain (R-AZ), the Air Force has decided against releasing the final contract value to taxpayers and it stands by its decision only to release estimates. Unfortunately, with a cost plus contract, the widely varied estimates that have already been publically released, and the Department of Defense’s long history of drastically underestimating final program costs, Chairman McCain is right to ask the Air Force to release a final cost, not only to come clean with taxpayers but also for oversight purposes.
Answering McCain’s questions at a Senate hearing earlier this month, Air Force Lieutenant General Arnold W. Bunch, Jr., Military Deputy, Office of the Assistant Secretary of the Air Force for Acquisition, said this about keeping the cost of the B-21 program classified (see Senator McCain’s questioning at the 1:21:28 mark):
Yes sir, at this time we have not released the contract value to everyone. We have released the service cost position and the independent cost estimate. We did release that. In base year ‘16 dollars it was 23.5 billion for the EMD phase.…We’re trying to balance the transparency that we want to do with the public so that they understand what we’re doing, but we’re also trying to protect the critical capabilities of this asset…. Sir, our—we’re trying to prevent the ability of individuals to link different pieces that may be unclassified together to get an idea of where we’re—how the money is being spent…. Sir, I believe that we have shared with the public and with the Committee…. They know that the—that our average procurement unit cost. We’ve released that, and we’ve released our cost—our independent cost estimate and our service cost position.
The contract for the B-21 was awarded to Northrop Grumman in October 2015. Phase one is the engineering and manufacturing development work. Phase two is the production of 21 aircraft out of the 100 that will ultimately be produced. The Department of Defense (DoD) contract announcement lacked any details about the award of the bomber. More details emerged in the Air Force’s announcement and its cost estimate, which shows 100 bombers will have a development cost $23.5 billion and an average procurement unit cost of $564 million per plane. The B-21 program is estimated to cost about $42 billion, but estimates have ranged from $33 billion to $58 billion, with the latter being deemed to be a “regrettable mistake.”
Senator McCain is extremely displeased that the Air Force isn’t releasing the final value of the contract. He’s not buying the service’s claim that people could connect the dots to learn something forbidden about the program. I can’t image any enemy of the state learning about the bombers qualifications and technologies from the public release of the actual contract price.
This contract has already generated quite a bit of controversy: Boeing and Lockheed filed a bid protest 10 days after it was awarded. The protest was denied by the Government Accountability Office (GAO), but like many other aspects of this deal, the decision wasn’t publicly released.
Another flash point is the fact that the B-21 is being procured as a cost plus incentive fee contract. Some think it should be a firm fixed price contract to avoid the cost overrun issues that plague the F-35, which could be headed off if a final contract price was disclosed. Although building a brand new bomber involves certain technical risks, Air Force officials concede that the B-21 will utilize many mature technologies, which critics think may be more appropriately handled as a fixed price deal
We hope that more details are forthcoming and that the secrecy surrounding this bomber doesn’t blow up DoD’s budget. I wonder how much taxpayers paid for this artist rendering. Or is that classified, too? It’s funny that the Air Force is more worried about the contract cost revealing sensitive information than it is about showing enemies what the plane will look like. I’m a lot better at playing connect the dots when I can actually see the outline of the image.
Scott Amey is General Counsel for the Project On Government Oversight. Some of Scott's investigations center on contract oversight, human trafficking, the revolving door, and ethics issues.
Authors: Scott H. Amey, J.D.
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