Northrop Grumman’s [NOC] Long Range Strike Bomber (LRSB) contract is backloaded to the point where the company is incentivized to get through the engineering and manufacturing development (EMD) phase as “soon as practical,” Air Force Secretary Deborah James said Monday.
The Air Force is rolling out additional details on the highly classified LRSB, or B-21, program, under what James called “strategic ambiguity:” provide transparency to the public while preventing potential adversaries from “connecting the dots.” The Air Force provided a number of details on the LRSB’s contract structure Monday, but James warned that the service wouldn’t provide many more details on the aircraft’s technology for “years.”
Air Force Assistant Secretary for Acquisition Lt. Gen. Arnold Bunch on Monday told reporters at the Pentagon the incentive structure as part of the contract awarded to Northrop Grumman has two components: costs and performance. While the schedule incentive is weighted more heavily than cost, he said the contractor must focus both cost and performance throughout the program to capture the amount of incentive fee which turns into profit for the contractor. Bunch added the schedule portion isn’t based on just getting to a date, it’s based on delivering capabilities and meeting requirements.
Bunch said Northrop Grumman doesn’t meet a deadline, the incentive fee goes down until it reaches zero. Though the incentive fee early on the schedule piece is lower, Bunch said it will become “dramatically larger” as the program gets more toward the point of delivering aircraft. He said there are various different formulas that go into the equation.
The Air Force also plans to eventually release a contract dollar value, Bunch said, though he was unsure when the service would release this figure. The Air Force has kept this number classified, instead providing a value in 2010 dollars. The Government Accountability Office (GAO) has said the LRSB EMD phase has an estimated value of $21 billion in 2010 dollars (Defense Daily, February 16).
The Air Force on Monday also announced the LRSB subcontractors. Pratt & Whitney [UTX] is developing the engine while GKN Aerospace, Janicki Industries, Orbital ATK [OA], Rockwell Collins [COL], BAE Systems and Spirit Aerosystems are working on what James called either airframe or mission systems (Defense Daily, March 7). Bunch declined to provide further details on what the contractors were specifically working on.