November 04, 2013
Corporate maneuvering may be throwing a wrinkle into plans for the next big U.S. Air Force combat aircraft program, the Long Range Strike-Bomber (LRS-B), as Boeing and Lockheed Martin formed a powerful team to win the $100 billion-plus program. Left as a wallflower, Northrop Grumman has pointedly not confirmed its intention to compete, indicating unhappiness with the Pentagon's approach. But with most aspects of the program classified, companies are generally silent about their plans.
Under the agreement announced Oct. 25, Boeing will be the prime contractor, with Lockheed Martin as its primary teammate. This is their second trip to the altar on the USAF's next bomber, having joined forces in 2007 on what was then the Next-Generation Bomber (NGB) (the deal was announced in early 2008). Aimed at delivering a new bomber in 2018, NGB was canceled as a full-acquisition program in 2009, due to a combination of cost, risk and the 2008 fiscal crisis, and the two companies continued work separately.
The LRS-B program is aimed at delivering 80-100 very stealthy long-range bombers to the Air Force, with an initial operational capability in 2024-26, and with a unit procurement cost ceiling of $550 million, not including engineering and manufacturing development (EMD) and upgrades. The Air Force was given the go-ahead for LRS-B in early 2011, with easier operational requirements than NGB, particularly related to endurance and a cost ceiling endorsed by senior Pentagon leadership.
Unlike NGB, the LRS-B is expected to work as part of a family of LRS systems, including a long-endurance stealthy unmanned air system (UAS) (already under development by Northrop Grumman, under a classified program) and a future cruise missile (LRS-M). It is likely to be smaller than NGB and earlier USAF bombers.
NGB has apparently survived as the umbrella title for a number of risk-reduction efforts, including, according to an industry source (AW&ST Dec. 3, 2012, p. 29), a large-scale flight demonstrator produced by the Lockheed Martin Skunk Works. “The risk being hedged against is the risk of not being able to deliver an aircraft in 2025,” one government official adds. “Unless you are close to flying something now, you are not going to do that.”
In an attempt to avoid the massive cost overruns endemic to its advanced programs, the Pentagon is imposing new constraints on the LRS-B program. Lt. Gen. Mark Shackelford, who retired in late 2011 as the Air Force's military deputy in the office of the assistant USAF secretary for acquisition, said in September at the Air Force Association's convention that the Pentagon is proposing many elements of EMD will be fixed-price, with cost-reimbursable line items limited to areas where the government sees risk. Incentive payments will be tied to tangible deliverables rather than paper milestones. Senior Pentagon leadership will supervise a “should-cost” process, controlling the release of money to the program office and retaining a contingency reserve.
The Pentagon expects contractors to invest in the program, Shackelford suggested. He told delegates that “keeping the program sold will be critical for some time” and that industry “has to be prepared to bridge until the government funding starts to flow.” The next round of study and risk-reduction contracts had been scheduled for first-quarter 2014, but given that more sequester-driven budget cuts are likely, “I wouldn't count on a first-quarter award,” he warned.