Congressional investigators, in two critical reviews, have accused the Air Force of trying to double-charge taxpayers $1.4 billion in its B-2 "stealth" bomber program and criticized the Navy for planning to spend another $2 billion on a sophisticated submarine-tracking system that may not be able to do its job.
The Air Force, faced with contract cost increases because of a Pentagon decision to cut the number of B-2 bombers and slow the plane's production schedule, proposed covering $1.4 billion in extra costs by charging the taxpayers twice for two aircraft, according to the General Accounting Office, the congressional watchdog agency. In addition, the service planned to spend $558 million on parts and subsystems for bombers that have not been approved by Congress, the GAO said.
Air Force officials said they were forced to devise the new funding proposal because the price of its first 10 production planes increased substantially when Defense Secretary Richard B. Cheney cut the B-2 program from 132 to 75 planes.
"We only had enough money to pay for eight aircraft," said a senior Air Force official. "We in good faith made a contractual arrangement and the assumptions changed dramatically."
The official said that even though the cost of the first production planes will increase because of the Pentagon program cuts, the government will save $12.8 billion over the life of the program. The 75 planes will now cost taxpayers an estimated $68.2 billion.
The GAO said the Air Force plans to cut two of the 10 bombers authorized and under construction, and seek funding for those two planes in a future budget. Investigators said the Air Force plan "artificially eliminates" the two aircraft and would use the money designated for those planes to pay for cost increases on the eight other planes.
The GAO report, which has not been released, was requested by House Armed Services Committee Chairman Les Aspin (D-Wis.), who supports killing the B-2 program after the completion of 15 aircraft.
Air Force Secretary Donald B. Rice proposed the plan after Congress turned down other proposed methods of covering cost increases, the GAO said. A senior Air Force official said yesterday that the four major congressional committees with Defense Department oversight agreed to the current funding change plan.
The Air Force proposal would also spend $558 million on systems for bombers not authorized by Congress in an effort to preserve favorable contracting arrangements between Northrop Corp., which builds the B-2, and its subcontractors, the report said.
In another review on a similar contracting issue, the GAO said the Navy is violating Defense Department policy with plans to pay $496 million for the first 28 sets of a new computerized submarine tracking system that has not been thoroughly tested and has been plagued by production delays and performance problems. The Navy eventually plans to purchase 240 of the systems for its submarine-tracking aircraft at a cost of about $2.1 billion, acccording to the GAO. The systems are being produced by AT&T Corp. for Boeing Co.'s aerospace and electronics division.
The GAO said the Navy is rushing the purchases of the partially tested avionics sytems to beat contractor deadlines and avoid future cost increases on the contracts.
"Possible cost increases do not justify spending almost $500 million on a system that has not been thoroughly tested," the GAO wrote in a report prepared for the House Government Operations Committee. "Failure to conduct rigorous testing greatly increases the possibility for producing and deploying a system that fails to meet its mission requirements."
"The Navy should not short-cut defense policies in this way," Committee Chairman Rep. John Conyers Jr. (D-Mich.) wrote in a letter to Navy Secretary H. Lawrence Garrett III urging him to delay purchase of the system until testing is completed.