Another major contract award for another major Pentagon weapons system. Promises that it will stay on budget and schedule. And this time, Pentagon officials say, they mean it.
But now that Northrop Grumman has won the lucrative, high-stakes competition to build the Long Range Strike Bomber, the most significant combat aircraft contract since the F-35 Joint Strike Fighter, the hard work is just beginning, analysts say.
The losing team of Boeing and Lockheed Martin are not yet conceding the fight, and in a terse but strongly worded statement Tuesday said they want to know more about why their bid came up short. A formal bid protest, should they chose to file one, could hold up the program.
But even if it doesn’t, “the long and potentially perilous development phase of the acquisition process is just beginning,” according to Todd Harrison and Andrew Hunter, defense analysts with the Center for Strategic and International Studies, a Washington think tank.
They warn that Congress could suffer “sticker shock” when members realize that the cost laid out by Air Force officials could grow when interest and other factors are included.
The Air Force set the marker for the program at an average price of $550 million per plane if 100 planes are built. The first ones off the line would cost more. And then, as the production achieved efficiency, the last ones would cost less. But that figure was set in 2010 dollars. Adjusted for inflation, that comes to more than $600 million a plane.
For such programs, the government requires an independent cost estimate, and that came in at $564 million a plane in current dollars. Add another $23.5 in research in development costs, and quickly the price tag jumps to almost $80 billion. Then there’s maintenance and the amount the Pentagon has already sunk into the program, and then the “total program cost will likely be more than $100 billion,” Harrison and Hunter wrote.
That’s a big number, especially considering that the bomber isn’t the only major combat aircraft the Pentagon has to pay for. In a tight budget environment, the new bomber could find itself competing for funding against the $400 billion F-35 program, noted Byron Callan, a defense analyst at Capital Alpha Partners.
Fresh off its victory, Northrop Grumman launched a website for the program that was part infomercial, part campaign flier, urging people to “support America’s new bomber.”
And it implored visitors to contact their elected representatives and sign a form letter that says, “Our national security depends on the ability to deter adversaries and defend American interests at a moment’s notice in any corner of the world. I urge you to support the LRS-B program to preserve our military’s advantages in a challenging and dynamic global environment.”
To prevent the kinds of cost overruns and schedule delays that have hobbled other programs, Pentagon officials have said they are putting their crack acquisitions team on the program and will protect against the kinds of “requirements creep” that sent other programs into a death spiral.
They say they are confident that the troubles that, for example, caused the F-35 to go billions over budget and years behind schedule won’t happen this time.
The technologies to be used in the new bomber have been tried and tested, they said, and the risks this time will be minimized.
But Harrison and Hunter warned that the bomber is still “ in a very early stage and substantial risk remains. The work of doing detailed design, integration and test of a large, complex, cutting-edge aircraft still remains to be done.”
The bomber is “like a young athlete entering a professional sports league,” they wrote. It may “be mature compared to past and current fellow rookies, but it is still a rookie.”
The analysts applauded the Air Force for getting the program “off to a good start.”
“But the stakes are high,” they warned, “and there is little room for error.”