Pentagon leaders again face the prospect of a year long continuing resolution and tens of billions of dollars in funding reductions, if Congress fails to agree on appropriations legislation for fiscal 2024.
Yet, at least one marquee modernization program, while not immune, may have more protection from the vagaries of DoD and congressional budget wrangling.
The U.S. Air Force B-21 Raider stealth bomber by Northrop Grumman [NOC] “was designed to be resilient to Washington turbulence,” Pentagon acquisition chief Bill LaPlante told a RAND forum on the PPBE Reform Commission, which is to release a final report on March 6.
DoD heeded “painful lessons” from the Nunn-McCurdy breach in 2010 of the Lockheed Martin [LMT] F-35 fighter, he said.
LaPlante served as Air Force acquisition chief between 2014 and 2017 during the inception of B-21 and began his current job in 2022.
“The F-35 had this gigantic production run, and, if you don’t hit the ramp, the price won’t come down, and the learning won’t happen so you had to hit that ramp,” LaPlante said on Feb. 8. “What do you think was attacked by the budgeteers, unfortunately, during those days [of sequestration]? It was going after the ramp. Our fear was you’d reach a point where it [F-35] would go into a ‘death spiral”–we’re not producing enough airplanes so Lockheed couldn’t get over the hump of learning. It never happened, thankfully, but we were worried.”
“So, for B-21, there’s no big ramp,” he said. “It’s like, ‘Stay away, budgeteers. Don’t touch me’ because we want to make it resilient. I don’t want to be pejorative to budgeteers. It’s really about the [budgetary] turbulence, but you can learn and design these programs to try to be survivable, given all the climates we’re talking about, but you have to really think hard.”
While the Air Force and DoD have said that the B-21 is progressing as scheduled, Northrop Grumman has reported financial difficulties on the program.
On January 25, the company reported a $1.2 billion after-tax charge on the program that covers the first five low-rate initial production (LRIP) options due to various “macroeconomic factors” impacting the cost to complete that work (Defense Daily, Jan. 25).
The Air Force awarded Northrop Grumman the first B-21 LRIP option late last fall after the B-21’s first flight. The remaining LRIP options are expected to be awarded through the end of the current decade with all the work on these done at a loss.
The macroeconomic factors behind last month’s reported after-tax charge include inflation, supply chain and labor constraints. Last year, Northrop Grumman said that it might seek relief from the government to offset the economic issues. The company has confidence in its cost estimates, as most suppliers are on contract for the B-21 LRIP lots, Northrop Grumman said.