WASHINGTON — As Sen. John McCain continues his crusade against the Air Force’s next-generation B-21 bomber, service secretary Deborah Lee James is warning of the cost in both dollars and time of terminating the contract.
“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 March 7 during a briefing at the Pentagon. “So these things are always possible. We certainly hope it won’t come to that.”
James’ statement was a pointed answer to McCain’s recent pledge to block funding for the Air Force’s new bomber so long as it is procured using a cost-plus contract — a contract vehicle he has railed against 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 Washingtonlate last month.
Told the Air Force has already signed a contract with Northrop Grumman for the engineering, manufacturing and development phase of the program, McCain scoffed: “That’s fine with me, they can do whatever the hell they want — we have to authorize procurement."
If McCain succeeds in cutting off funds for the B-21, the Air Force may be forced to start from scratch on a new competition for a long-range strike bomber capability.
Top Air Force officials, including the secretary, took to Capitol Hill to defend their acquisition strategy last week in closed and open briefings to various committees, including McCain’s Senate Armed Services Committee. However, the meetings did little to appease the Arizona Republican’s concerns, a spokesman said last week.
"Senator McCain continues to be concerned about the cost-plus structure of the B-21 development contract," McCain’s office told Defense News on March 2. "He will carefully consider his legislative options to address these concerns."
The Air Force will continue to stress the nation’s need for a B-21 bomber in continuing classified and unclassified sessions on Capitol Hill, James said March 7.
“We just continue to tell the story, so I don’t have any assurances of anything [from McCain] other than this is a capability we need for the country,” James said. “We put very thoughtful process together looking to those successes as well as to programs that were not successful in the past, and we have crafted a good strategy we believe going forward.”
Lt. Gen. Arnie Bunch, the Air Force’s deputy assistant secretary for acquisition, gave additional details on the B-21 contracting structure after James’ remarks. The cost-plus EMD contract has been set up with incentives for the contractor to collect fees based on meeting cost and schedule goals, Bunch told reporters. The schedule incentive is actually the more heavily weighted of the two, he noted.
“It’s based on meeting event dates and it’s based on delivering capabilities and meeting requirements, not just getting to a date,” Bunch said. “If the contractor doesn’t meet it on the expected date or the set date, then the incentive fee, or the profit, goes down until it goes to zero.”
The incentive fees increase toward the end of the EMD effort, so the contractor is motivated to finish the program as soon as is practical, James said.
The Air Force will share more information about the secretive B-21 bomber in the coming months in an attempt to shore up support for the costly program, officials said March 7.