Originally published at 10:02 a.m. EST, this story was updated to include comments from the Air Force and House Armed Services Chairman Mac Thornberry.
WASHINGTON and ORLANDO — The powerful chairman of the Senate Armed Services Committee, Sen. John McCain, told reporters Thursday he would not authorize the Air Force’s Long Range Strike-Bomber so long as it was procured using a cost-plus contract — a contracting vehicle he has railed at in the past.
“I am saying I will not authorize a program that has a cost-plus contract — and I told them that,” McCain, R-Ariz., said at a Defense Writer’s Group breakfast in Washington, D.C.
McCain's comments came ahead of a formal, closed briefing during which Air Force officials will brief the committee on LRS-B, a top general told Defense News.
“My biggest concern is the cost-plus provision in the contract. I will not stand for cost-plus contracts. They will say its because they’re not sure of some of the things they need in the development stage," the senator said. "Fine, then don’t bid on it until you do know. If you have a cost-plus contract, tell me one time that there hasn’t been additional costs, then I would reconsider. The mindset in the Pentagon that still somehow these are still acceptable is infuriating.”
McCain was categorically opposed to contract structure and expressed unwillingness to hear the Air Force’s argument on the matter — while brandishing his iPhone to make a point.
“Silicon Valley built the latest one of these without a cost-plus contract,” he said of his smartphone. “ ‘Well, the technology is such that we’re not sure of it.’ Somehow the commercial side can do this without a cost-plus contract. It is an evil that has grown and grown and grown over the years, and I will not stand for it on any weapon system.
“I don’t have to have a briefing to know that there was cost-plus contacting.”
Told the Air Force had signed contracts, McCain scoffed: “That’s fine with me, they can do whatever the hell they want, we have to authorize procurement."
The Air Force pointed out in a statement following McCain’s remarks that the LRS-B contract, awarded to Northrop Grumman Oct. 27, will actually be divided into two parts: one cost-plus and one firm fixed price. For the first phase, engineering and manufacturing development, the contract has been set up to be cost-plus with incentives; the second part, for initial production of the first five lots of aircraft, will be firm fixed price. Those first five lots will cover the production of 21 bombers.
In developing the acquisition strategy and contract for the LRS-B, the Air Force built upon lessons learned from previous acquisition programs, according to the statement.
“The Air Force values the oversight role that Senator McCain has and looks forward to continuing to work with him and the Committee on moving forward with this critical capability for the Department and the nation,” the statement reads. “The Department looks forward to being able to provide the Senator a complete briefing of the program at his earliest convenience.”
The Air Force will address McCain’s concerns during closed briefings with the SASC and the House Armed Services Committee in the next few weeks, Lt. Gen. Arnie Bunch, the Air Force’s deputy assistant secretary for acquisition, told Defense News on Feb. 25 at the Air Force Association’s Air Warfare Symposium in Orlando, Florida.
“We will go back and we will analyze what Sen. McCain said, we will go over and work with him and his staff,” Bunch said.
If McCain hopes restrict the LRSB as part of his committee's 2017 defense policy bill, which has yet to be drafted, it would have to be reconciled with the House Armed Services Committee's eventual version. HASC Chairman Mac Thornberry, R-Texas, signaled Thursday that he was not on board with McCain's hard stance.
"We will have differences because we're two different bodies and we will work through them like we do," Thornberry said.
The HASC has in hearings tackled questions of acquisitions reform, specifically the advantage of developing technologies to maturity before committing to mass production as a means of limiting costs.
"I've talked several times this year about the importance of having mature technology before you go into production," Thornberry said. "A lot of what happens with cost-plus situations is the technology's not mature so you don't know what it's going to cost because you haven't invented it yet. That's exactly what we're trying to get away from."
McCain also criticized the Air Force for keeping the names of the suppliers, even the engine manufacturer, under wraps. He called the secrecy surrounding the program “stupid.”
“Someone, somewhere is going to see some engines being made and say, ‘Hey,’ ” he said. “It could be at Pratt & Whitney or Rolls-Royce, or wherever the hell that is. I mean some of this is just stupid. So, it’s kind of the classic Pentagon — I don’t know what it is, but we will find out who makes the engines.”
McCain was sympathetic to arguments that the program’s classification must be eased to garner congressional support.
“If someone wants to build an engine for an airplane that requires congressional authorization, then it must be known who’s making it and under what circumstances,” he said.
In addition to the names of the suppliers, the Air Force is also keeping a close hold on the value of the Oc. 27 contract award, as well as the bomber’s size, weight, payload and the extent of its stealth capabilities.
McCain is not the only observer to criticize the Air Force for its lack of transparency on LRS-B. Retired Gen. John Michael Loh, who served as the chief of Air Combat Command, recently urged the Air Force to release additional details in order to drum up support for the costly program in the public eye and on the Hill.
“You are going to have to fight for LRS-B every day, every week, every month, every year, because there are people out there that are going to try to kill it, they are all over this town,” retired Loh said. “The sooner the Air Force can release the team, the industry team on LRS-B, the more support you are going to get. If you don’t do that, it isn’t going to survive.”
Gen. Robin Rand, commander of Global Strike Command, declined to address McCain’s remarks specifically, deferring comment to the Air Force secretary and chief of staff. However, Rand stressed that the service will do its best to explain the critical need for LRS-B to critics on Capitol Hill and beyond.
“There will be people who have opinions, and I will give my opinion, and we will explain to them,” Rand said Feb. 25 during a media briefing at the AFA symposium. “We are going to make sure that we do our best to articulate, again, the requirements and what national security dictates — I think it will be very logical that we are going to need this platform.”
Rand has testified on the Hill on the importance of LRS-B, but has not had the opportunity to be part of any classified briefings on the program with McCain, he said.
Now that the competition and the protest period is over, Rand assured reporters the Air Force will “be a little more forthcoming” about the next-generation aircraft’s capabilities and suppliers.
“Trust me that that is on my plate to do that, the strategic communication is very important,” Rand said.
The Air Force will unveil additional details about the secretive program in early March, Lt. Gen. Mike Holmes, deputy chief of staff for strategic plans and requirements, said Feb. 18. However, he declined to say exactly what information the Air Force plans to roll out.
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