The Air Force dropped items costing billions of dollars when it submitted its B1 manned bomber program to make it seem much cheaper than it will be, the General Accounting Office says in a draft report.
The draft listed "questionable reductions" of $2.26 billion that were made to "accommodate" the estimated basic cost goal of $19.7 billion -- the figure Congress is working with as it nears final action on the 1982 defense authorization bill.
One of the reductions, for avionics production, accounted for $86 million but "could not be explained" by the Air Force Program Office, the GAO said. Another, for $800 million, is for economies to be achieved through a contracting device called multi-year procurement. This assumed saving "is "questionable because it assumes a stable production program before system testing is completed," the draft said.
In addition, the GAO said, the Air Force met its $19.7 billion target by:
Omitting at least $1 billion in expenses that are "directly related" to B1 development, production, testing and initial deployment, but that will be paid for out of funds appropriated for other programs.
Not counting $1.53 billion to $3.28 billion for items likely to be found "desirable" as "testing requirements evolve and improvements are made to the basic aircraft," such as a $650 million capability to carry Cruise missiles.
A copy of the draft was obtained by The Washington Post yesterday, a day after the Defense Department admitted at a Senate hearing that the $19.7 billion estimate falls far short of what it knew to be reality.
The Pentagon's use of "low-ball" or "buy-in" figures that are unclear about exactly what items are covered has been a commonplace technique for getting Congress to commit itself to fund major weapons programs. Rarely, however, has the technique been bared even before Congress has acted. By coincidence, the exposure of the rubbery B1 figures occurred while House-Senate conferees were considering the Nunn amendment, to curb such practices.
Reacting yesterday, Defense forsook the $19.7 billion estimate in testimony before the Senate Armed services strategic and theater nuclear forces subcommittee.
Assistant Secretary and Comptroller Jack R. Borsting said that in 1981 dollars, the $19.7 billion properly should have been $20.5 billion; in 1982 dollars, he said, the correct figure is $22 billion, but it could be 3 percent or 4 percent higher. He wasn't clear whether the figure counted certain items, such as a second inertial navigation system. That system's estimated cost was put at $220 million in the GAO draft.
James P. Wade Jr., principal deputy undersecretary for research and engineering (R&E), acknowledged plans to add a security-classified "nuclear feature" although its estimated $50 million cost is not included in the Borsting figures.
Wade testified he did not know if the program as now written includes a so-called permissive action link, which would enable an airborne B1 crew to disable a nuclear weapon. No cost estimate was available for the link, which the GAO draft said is "a required nuclear safety device" described by Defense officials as "necessary" and destined to be added to the program.
Thomas K. Jones, a R&E deputy undersecretary, was uncertain whether the program as it stands provides for a safety system for suppressing fires in B1 fuel tanks hit by conventional shells. Originally, according to the GAO draft, however, the system was included in the program, "but it was deleted to reduce cost."
The draft's list of "questionable" cost reductions included $440 million in the allocation for engineering change orders. The GAO said it was told by Air Force officials that the reduction--about 30 percent of the original total--could limit the ability "to correct system deficiencies and keep support costs low."
The report also said that the basic design relies on avionics that "do not satisfy military standards recently adopted by the Air Force." Meeting the standards would cost an estimated $65 million and delay the program 6 to 12 months.