The U.S. Air Force is on a collision course with Sen. John McCain, R-Ariz., over his threat to shoot down its procurement of the new B-21 Long Range Strike Bomber through an $80 billion contract with Northrop Grumman Corp. Discussing McCain’s concerns that costs could spiral out of control, Air Force Secretary Deborah Lee James said at a Pentagon briefing Monday there are ways out of the contract should it become necessary.
“It is always possible to terminate a contract — you terminate, you pay fees to terminate, you can rebid it, which of course takes more money and time,” James said. “So these things are always possible. We certainly hope it won’t come to that.”
Chairman of the Senate Armed Services Committee, McCain is concerned the so-called plus-cost contract, which means that Northrop Grumman can charge for all its expenses plus more to attain a profit on the deal, will result in the final price soaring past the proposed $80 billion. McCain has been a strong advocate of fixed-price contracts that ensure military costs remain low and projects do not exceed their bid prices, as happened with the F-35 Joint Strike Fighter program, which is about $200 billion over budget, and the now-canceled Zumwalt-class destroyer program, which cost $22.5 billion and produced just one ship.
McCain has threatened to block funding for the B-21 aircraft, which will cost around $500 million for each unit, as long as it remains a cost-plus contract. He and Mac Thornberry, chairman of the House of Representatives Armed Services Committee, are both defense hawks who favor more fiscally conservative procurement programs for the military.
“I am saying I will not authorize a program that has a cost-plus contract — and I told them that,” McCain said at a Defense Writers Group breakfast in Washington last month, according to a Defense News report. After being told the Air Force had already signed a contract with Northrop Grumman for the development, engineering and manufacture of the B-21, McCain said, “That’s fine with me, they can do whatever the hell they want [but] we have to authorize procurement,” referring to the congressional committees that control military budgets.
In an attempt to placate McCain, a Navy officer during the Vietnam War, Air Force officials, including Secretary James, went to Capitol Hill last week to defend their acquisition strategy in a closed briefing before a Senate subcommittee. However, the briefing did not convince McCain of the B-21 contract’s merits.
“Senator McCain continues to be concerned about the cost-plus structure of the B-21 development contract,” his office told Defense News March 2. “He will carefully consider his legislative options to address these concerns.”