In the nearly eight years since Northrop Grumman inked a contract to design the Air Force's new nuclear bomber, lawmakers and Defense Department officials have touted it as an example of acquisition done right amid years of cost overruns and schedule delays in other programs.
House Armed Services Committee Ranking Member Adam Smith (D-CA), a longtime critic of the F-35 program -- going so far as to call it a "rat hole" -- has praised the B-21 effort.
“The stats to begin with are: It took seven years to put them together, it’s half as expensive as the B-2, it’s on time, it’s under budget and it’s meeting its requirements,” he told Inside Defense at the Reagan National Defense Forum in December.
Air Force spokeswoman Maj. Alli Stormer told Inside Defense that much of the program’s cost and schedule success can be attributed to close collaboration among the Air Force Rapid Capabilities office that oversees the program, U.S. Global Strike Command and Northrop Grumman.
“Air Force Global Strike Command, the lead command for the B-21 program, has embedded operators and maintainers within the DAF RCO to manage the program alongside the B-21 acquisition team,” Stormer said in an email. “This close partnership has enabled requirement stability throughout the program's engineering, manufacturing and design phase, preventing inefficient design churn, saving the program both dollars and time.”
The Air Force and Northrop have worked closely with suppliers to “aggressively identify and mitigate risks early and throughout the program,” Stormer said.
“The Air Force in partnership with Northrop Grumman seeks to use all the tools at their disposal to drive program performance,” Stormer said. “Those tools include using budgeted resources, adjusting contract approaches, continually aligning incentives to motivate program objectives, and a general willingness to make the necessary dynamic adjustments to drive program execution.”
The B-21 program is “emblematic of fully leveraging and embracing” the approaches of the Pentagon’s directive on defense acquisition, DOD 5000.01, Stormer said. The RCO has also worked with other programs offices throughout the DOD to share best practices used on the B-21, she said.
The program has its skeptics, however.
Geoff Wilson, director of the Center for Defense Information at the Project on Government Oversight, said he isn’t “filled with optimism” for the program, particularly since much of the information about it is still classified. He also noted that other modern aircraft development programs -- such as the F-22 and F-35 -- have gone over budget.
“My cynical opinion is that the Air Force especially is looking for a win,” Wilson said in an interview. “They want to show, ‘Oh my god, we’re finally building an aircraft on time and on budget.’ But given the tremendous amount of secrecy over this program, it’s at least tough for me to evaluate whether or not that’s true.”
First test flight TBD
Northrop Grumman won the award for the engineering and manufacturing development contract for B-21 in 2015. At an unveiling ceremony in December, Northrop executives and Air Force officials lauded the partnership and the program’s success to this point.
“The B-21 will allow us to deliver that capability on day one,” Air Force acquisition chief Andrew Hunter said in a media briefing ahead of the unveiling. “It’s also been developed and been produced in a way that allows us to deliver that capability over time. So as the missions that we have to perform change and as the threat evolves, the B-21 will continue to be able to perform that mission for the long term.
Officials had previously said the first test flight would be this calendar year, but the Air Force has since begun hedging whether that will happen. The timing for the first flight will be event-driven rather than set for a specific date, Stormer said.
“The program is intensely focused on ensuring the first flight test aircraft is a high-quality build using production processes, production tooling, and the production workforce in order to drive production maturity,” she said.
First production aircraft are expected to arrive in the mid-2020s, but the timeline for further milestones is classified, Stormer said.
Managing costs
The B-21 remaining on schedule and on cost stands in stark contrast to other major DOD programs, such as General Dynamics’ Columbia-class submarine and Lockheed Martin’s F-35 Lighting II aircraft. But the program also exists in the shadow of the last bomber -- the Northrop-made B-2 Spirit, which cost billions of dollars more than budgeted when it was fielded in the 1990s.
The Air Force set average procurement unit cost, or APUC, as one of the program’s key performance parameters, Stormer said, as a way to control the B-21’s cost. Set at $550 million in 2010 dollars or $692 million in 2022 dollars, the APUC includes all flyaway costs, support equipment, training, spares and potential engineering change orders.
“The APUC KPP has shaped the program in significant ways, including decisions made early-on in the B-21's design phase to use existing and mature technologies,” Stormer said. “Further, decades of lessons learned from the B-2 have been incorporated in the B-21 design. This has allowed the team to plan well ahead of time how to optimize B-21 sustainment to optimize future operational availability and effectiveness.”
The service lowered the risk of cost overruns by requiring a certain level of technical maturity for the platform’s capabilities, J.J. Gertler, a senior analyst with the Teal Group consultancy, said in an interview last month. The B-21 didn’t start as a “clean sheet of paper” where the government and industry was developing subsystems concurrently with the aircraft, Gertler said, so it’s less likely than a typical program to see overruns.
Future sustainment
With its triangular shape and flattened profile, the B-21 bears a striking resemblance to the B-2, the only other stealth bomber. With few details about the aircraft unclassified, the most noticeable difference between the two is the B-21’s light gray color.
Unlike the B-2, officials said they don’t believe the B-21 will see ballooning costs in sustainment.
“We know most of the Air Force life cycle costs are in that sustainment phase,” Northrop CEO Kathy Warden said at the December unveiling. “We learned a lot from the B-2 that we’ve applied to the B-21 in that regard.”
Meanwhile, the Air Force has secured technical data rights to create an opportunity for future competition for sustainment contracts, Stormer said. In contrast, Lockheed Martin retains the technical data rights for the F-35, practically locking the company in for sustainment contracts, which has been a sore spot for Congress.
Smith, of the House Armed Services Committee, and other lawmakers have called for reform to intellectual property agreements to avoid “vendor lock” and increase competition.
Predictive maintenance plans are also built into the B-21, Stormer said, using commercial industry practices as a model. Predictive maintenance uses a variety of data points to better determine the lifespan of a component, which allows for more efficient scheduling and maintenance work.
Design innovations
Official’s lauded Northrop’s use of digital manufacturing, which created digital models of the aircraft during the design and production. Smith praised the flexibility digital manufacturing provides in programs like the B-21.
“I think it really does point up the effectiveness of digital manufacturing,” Smith said. “With digital manufacturing you’re able to build in greater efficiency and maintain competition for a longer period of time so you are not locked into a given system.”
Warden, Northrop’s CEO, said the program incorporated digital practices from the beginning as the company and the Air Force assessed thousands of designs in a digital environment for the platform before selecting what would become the B-21.
“We also have been testing elements of this aircraft in digital form before building hardware,” she said, “which has allowed us to take risk out of the program and helps the program to achieve its schedule and cost objectives.”
Working to mitigate inflation
The Biden administration is expected to release its fiscal year 2024 budget March 9, at which point Pentagon officials will have an opportunity to discuss the B-21 and the rest of the U.S. nuclear arsenal following Russia’s recent suspension of its participation in the New START Treaty.
In a note to clients, analyst Byron Callan of Capital Alpha Partners, highlighted a Congressional Budget Office report from August 2020 titled “The Potential Costs of Expanding U.S. Strategic Nuclear Forces if the New START Treaty Expires.”
The report details several options, one of which includes expanding the Pentagon’s purchase of B-21 bombers.
But Callan notes that “higher production rates on B-21 are conceivable but likely not until the late 2020s-2030s.”
Meanwhile, Northrop’s Chief Financial Officer Dave Keffer said during a recent earnings call that the company is working to mitigate cost burdens for the low-rate initial production phase of the aircraft, which is under a fixed-price contract negotiated in 2015 and doesn’t take recent inflation into account.
But Keffer noted a loss related to the program’s LRIP lots was “possible” but not “probable.”
“It’s unique in our portfolio in having been priced that long ago and being in a meaningful scale,” he said. “That’s why, through the macroeconomic pressures over the last couple of years, we determined it was appropriate based on the set of conditions we’re looking for to note the potential risks.”
Keffer said the company is working with suppliers to reduce production costs.
“I don’t think there is a playbook for government or industry to manage through situations like this, and we’re addressing it in real-time,” he said. “As I mentioned, our focus is really on executing well on the program, performing as efficiently as we can, and then we’ll work with the customer to address any impacts that they deem appropriate, but it would be preliminary for me to try to predict exactly how those discussions might go.”