The Defense Department admitted yesterday that it has been promoting the B1 manned bomber program to Congress without disclosing that it expects to incur up to $1 billion in additional costs.
The admission was made at a Senate hearing as House-Senate conferees neared final approval of the 1982 defense authorization bill, which includes $2.43 billion in research and development costs for the B1.
Under questioning by Sen. Carl Levin (D-Mich.), Milton A. Margolis, head of the Pentagon's Cost Analysis Improvement Group, acknowledged that Congress had not been told of additional research and development costs estimated by Levin at $500 million to $1 billion.
"That $1 billion equals the entire budget of the state of Arkansas," interjected Arkansas Sen. David H. Pryor, a Democrat.
Levin also brought out that although "never a word has been breathed about it" to the responsible congressional committees, the bill for the B1 program will be further increased by "a whole host" of additional items, such as underestimates of certain testing and production costs. An aide to Levin estimated the combined cost of the items at $3 billion or $4 billion.
The estimated cost of the 100-aircraft program, approved by President Reagan Oct. 2, has been soaring. Early this year, Pryor recalled, Rockwell International, the prime contractor, put the cost at $11.9 billion. In May, the Air Force was figuring $15 billion to $18 billion. Then Pentagon officials upped the ante to $19.7 billion. Now, Pryor said, "we hear estimates ranging from $20 billion to $30 billion."
Is this "a classic case of a 'buy-in'?" Pryor asked Deputy Secretary of Defense Frank C. Carlucci. "No, I don't think so," Carlucci replied.
The official conceded to Pryor that the B1's mission has yet to be formally defined but said it is "entirely appropriate" that the mission be changed as the nature of the threat changes.
In a related development at the hearing, Chairman William V. Roth (R-Del.) of the Senate Governmental Affairs Committee released data showing that the average cost overrun on 47 major weapons systems, which tripled between 1969 and 1978, doubled between 1978 and 1981. A House Government Operations subcommittee previously had reported that the average cost of the systems exceeded the original planning estimate by 31 percent in 1969 and by 98 percent in 1978. In an update done for Roth, the General Accounting Office said that as of June, 1981, the increase was 190 percent.
Backed by both Democratic and Republican committee members, Roth warned that what Sen. Warren Rudman (R-N.H.) termed the "very fragile" public support for large defense spending could be imperiled "by only a few scandals" in procurement such as "the kind of cost overruns we have experienced in the last decade."
"This national consensus . . . will quickly turn to outrage if the taxpayers see too many more defense dollars going to pay for cost overruns, delays and gold-plated 'tin lizzies' instead of effective military equipment," Roth said. "My concern is that we have been engaging in a kind of gold-plated unilateral disarmament even without a SALT agreement."
Carlucci was pressed hard about an amendment to the pending defense authorization bill that would drastically tighten Pentagon accountability for large overruns on nearly 50 major weapons systems, and that Roth praised as "extremely creative." The amendment's sponsor, Sen. Sam Nunn (D-Ga.), and a leading foe, Rep. William L. Dickinson (R-Ala.), have agreed that the Pentagon is opposing the amendment.
Carlucci denied that the Pentagon is opposed to the amendment, asserting that while the Defense Department has "a number of technical problems" with the amendment, it would be "glad to work with" Nunn to develop "a satisfactory" version.
But Sens. Rudman, an amendment co-sponsor, and Levin both expressed doubts, saying that they repeatedly had found the Pentagon "adversarial" to legislative efforts to improve military procurement.
Carlucci outlined the Pentagon's own list of procurement reforms. One, "delegating more responsibility and authority," drew sharp criticism from Gordon W. Rule, who retired as the top civilian procurement specialist after receiving the Navy's top civilian award.
"The more you delegate," he testified, "the more you are sending a signal to the armed services to 'just hurry up and get the hardware and don't worry about ever being held accountable for your costly omissions or commissions.' "
Rule, openly disdainful of the "warmed-over" Carlucci list of reforms, offered some proposals of his own, including firing Pentagon managers who goof up and swearing in officials who present weapons system cost estimates to Congress.