U.S. Bomber Planes at $81 Billion Seen 47% More Than Plan

December 7, 2013
By

The U.S. Air Force’s new long-range
bomber may cost as much as $81 billion for the 100 planes
planned, 47 percent more than the $55 billion sticker price the
service has listed.

The Air Force based its estimate of $550 million per plane
on the value of the dollar in 2010, and it represents only the
production costs for an aircraft that won’t be deployed for at
least 10 years. Including research and development, the bomber
would cost as much as $810 million apiece in this year’s
dollars, according to calculations by three defense analysts.

The cost of the new bomber will draw close scrutiny in an
era of declining defense budgets, as the Pentagon faces $500
billion in reductions over nine years under the budget process
called sequestration. The Air Force’s track record also is being
questioned after soaring costs for the aging B-2 stealth bomber
the new plane would replace and the F-35 fighter jet, the most
expensive U.S. weapons system, that’s now being built.

“The Air Force has zero credibility on start-of-program
cost estimates unless and until it ponies up real details about
the bomber and its acquisition plan,” Winslow Wheeler, a former
Government Accountability Office defense analyst now with the
Project on Government Oversight in Washington, said in an e-mail. “It is a fool’s errand, or worse, to pretend the cost
stated now is anything but a bait-and-switch buy-in gambit.”

B-2, F-35

The B-2 was planned as 132 planes for about $571 million
each in 1991 dollars before the first Bush administration cut
the fleet to 20 planes in the early 1990s. That resulted in a
price of about $2.2 billion per bomber, a fourfold increase, in
a program that remained highly classified during its
development.

The F-35 program has a current price tag of $391.2 billion
for 2,443 aircraft, a 68 percent increase from the projection in
2001, as measured in current dollars, for 409 fewer planes than
originally planned.

Whatever its ultimate cost, the new bomber would mean
billions for the defense contractor chosen to build it. Lockheed
Martin Corp. (LMT)
of Bethesda, Maryland, and Chicago-based Boeing
Co. (BA)
, the No. 1 and No. 2 U.S. defense contractors, said in
October that they’ll bid for the project as a team. They may end
up competing against Northrop Grumman Corp. (NOC) of Falls Church,
Virginia, the prime contractor for the B-2, which hasn’t yet
announced an intention to bid.

The Air Force has requested $379 million in funding for
development this year, increasing to more than $1 billion in
fiscal 2015 and $2.8 billion in fiscal 2018, according to data
released by the service.

Through 2023

The Air Force hasn’t provided its rationale for the
increased spending. The Congressional Budget Office said the Air
Force plans to request $32.1 billion through 2023.

The $550 million per plane projection for the new bomber is
“the only cost estimate approved for public release at this
time,” Air Force spokesman Ed Gulick said in a statement.

Gulick said the estimate is a “target that helps balance
capabilities and cost” and is being used in “rigidly
containing the design” of the bomber.

The more complete “program acquisition unit cost” will be
derived later by adding research and development, as well as
estimating “inflation up to the year you purchase aircraft,”
Gulick said.

The Air Force’s cost estimate “seems rather ambitious,”
said Todd Harrison, a defense budget analyst with the Center for
Strategic and Budgetary Assessments, a Washington-based policy
group. He calculated a price of $810 million a plane in fiscal
2014 dollars, or $81 billion for 100, based on $20 billion in
projected research and development costs.

Historical Increases

“Aircraft programs, and stealth aircraft in particular,
have gone far over their initial cost estimates,” Harrison
said. “If you factor in historical cost growth, the total
program cost could easily top $100 billion.”

Russell Rumbaugh, a defense analyst with the Stimson
Center, also a policy group in Washington, said his comparable
estimate is $682 million per plane. Kevin Brancato, a defense
analyst with Bloomberg Government, projected $784 million per
plane in this year’s dollars.

“The incentives in the budget system almost force the
services to low-ball their cost estimates,” said Gordon Adams,
a professor at American University in Washington who oversaw the
national security budget for the White House under President
Bill Clinton. “Otherwise they do not get the program in the
budget. It grows later.”

The Air Force now operates a fleet of 159 long-range
bombers, including 63 swing-wing B-1Bs developed in the 1980s by
Rockwell International, which is now part of Boeing, and the 20
B-2s from the 1990s.

Aging B-2s

The new bomber is needed because the “B-2 is an older
airplane that’s getting expensive” to maintain and “it’s not
as stealthy as we’re now capable of making aircraft,” Deputy
Defense Secretary Ashton Carter said in an interview before he
left office Dec. 4.

As the Air Force anticipates its needs 10 or 20 years from
now, “expecting those aircraft to perform reliably at such
advanced ages may prove to be overly optimistic,” said Mark Gunzinger, an airpower analyst with the Center for Strategic and
Budgetary Assessments.

The Air Force is still flying 76 B-52 bombers from the H
series that entered service in May 1961. They remain capable of
launching conventional and nuclear bombs and cruise missiles.

Top Projects

The Air Force has identified the new long-range bomber as
one of its top three weapons projects, along with the F-35 from
Lockheed and the KC-46 aerial refueling tanker made by Boeing.

Defense Secretary Chuck Hagel has said the bomber will
support the U.S. strategy of rebalancing toward Asia. Pentagon
officials have said they’ll do as much as they can to shelter
such priority weapons systems from the automatic budget cuts.

An Air Force summary of the bomber describes a stealth
aircraft able to deliver both nuclear and conventional weapons.
While the “baseline aircraft” would be piloted, the bomber
would be designed to “enable future unmanned capability,”
according to the service.

Beyond that, the Air Force, which has said the bomber would
incorporate “proven technologies,” has said little about its
classified plans for the new plane.

“It would be a mistake to view this aircraft as simply
another bomber,” said Retired Lieutenant General David Deptula,
the Air Force’s former chief of intelligence, surveillance and
reconnaissance.

‘Cloaked in Secrecy’

It may take off on a bombing run, using intelligence and
surveillance sensors provided from other platforms and on-board
jammers to degrade ground radar, he said in an e-mail. The
bomber crew also could use its radar and sensors to direct land-and sea-based strikes, as well as collect intelligence on the
return flight, according to Deptula, who helped plan the air
campaign in the 1991 Gulf War.

“The operational characteristics are going to be cloaked
in secrecy for a while, and I think that makes perfect sense,”
Air Force Chief of Staff General Mark Welsh told reporters in
November.

Welsh said capabilities would be carefully weighed against
the $550 million-a-plane target.

“What we don’t want to do is try to reach into some level
of technology that’s impractical.” That’s when “prices start
to get out of control and your requirements start to drift,”
Welsh said. “We are not going to go there.”

Adams cited the B-2’s cost escalation, as well as plans for
a medium-range bomber that Defense Secretary Robert Gates
canceled as too costly in 2009. Gates supports the new bomber.

“How many times are we going to go down this overpriced
bomber road?” said Adams said. “It’s like Lucy with the
football. We never get to kick an affordable aircraft through
the goalpost.”

To contact the reporter on this story:
Tony Capaccio in Washington at
[email protected]

To contact the editor responsible for this story:
John Walcott at
[email protected]


Enlarge image
B-2 Stealth Bomber

B-2 Stealth Bomber

B-2 Stealth Bomber

Elsa/Getty Images

The Air Force’s track record is being questioned after soaring costs for the aging B-2 stealth bomber the new plane would replace.

The Air Force’s track record is being questioned after soaring costs for the aging B-2 stealth bomber the new plane would replace. Photographer: Elsa/Getty Images

Article source: http://www.bloomberg.com/news/2013-12-06/u-s-bombers-seen-costing-81-billion-47-more-than-plan.html

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