The Air Force’s $25 Billion Bomber Blunder

No one knows what the Air Force’s top-secret new bomber will look like. But the service keeps saying it knows how much it’s going to cost. That’s what makes the Air Force’s $25 billion price tag error so disconcerting.

The problem began last year, when the service told Congress the yet-to-be-built Long-Range Strike Bomber would cost $33.1 billion between 2015 and 2025. It recently updated the estimate (from 2016 to 2026) to $58.4 billion—a hike of $25.3 billion, or 76%.

That works out to a swing of $169 for each of the roughly 150 million Americans who file federal tax returns. But, the Air Force acknowledged last week, the latest cost estimate to develop and buy the aircraft over the coming decade is pegged at $41.7 billion. Apparently, the fledgling stealth bomber can elude fiscal reckoning as well as enemy radar.

The pair of multi-billion-dollar snafus—$9 billion too low last year, $17 billion too high this year—is head-spinning. It leads to a simple question: is anyone minding the store?

Calculating the cost and timetable of new weapons is always difficult. Military hardware is constantly pushing the boundaries of what is possible (the new bomber, for example, will be “a long-range, air-refuelable, highly survivable aircraft with significant nuclear and conventional stand-off and direct-attack weapons payload,” according to the Air Force). The military hierarchy has strong institutional incentives to lowball costs and tighten schedules despite the state-of-the-art systems under development that challenge both. Lower costs and quicker production make it more likely that a weapon will be bought.

That helps explain why a weapon’s final cost, at the end of a production run, usually bear little resemblance to initial projections (and the inevitable delays drive up costs, which reduce the numbers of aircraft, tanks or ships to be bought, which drives up costs, and so on).

But none of that explains why the Air Force flubbed its numbers for the new bomber. Sure, early cost projections (drafted by an alliance of a military service that wants to buy what’s being built, and by contractors who want to sell it), are squishy.

But the Long-Range Strike Bomber was supposed to be different. Ever since 2011, the Pentagon has been saying the new warplane will cost $550 million a jet (although that estimate uses 2010 dollars, requires buying up to 100 of the new planes, and doesn’t include an estimated $20 billion more in research and development efforts that will be required to build it). In other words, it will cost a lot more than $550 million apiece, and taxpayers will invariably foot the higher bill.

The Long-Range Strike Bomber (it’ll eventually get a nifty name, like the B-3 Stealthstratofortress soon enough) isn’t a run-of-the-mill program. After all, it’s one of the service’s top programs, something the Air Force says is a vital replacement for the aging B-52 and B-2 bomber leg of the nuclear triad, which also includes land-based intercontinental ballistic missiles and submarine-launched missiles. A team of Boeing and Lockheed Martin is competing against Northrop Grumman to build it. The service announced last June it expected to select a contractor by this past spring, but that announcement has slipped until fall.

Rebuilding the nation’s nuclear triad is serious business. The cost estimates, contained in annual reports to Congress on how much the nation is modernizing its atomic forces, should have been double-checked, coordinated, scrubbed and double-checked again to ensure their accuracy.

While they’re only estimates—and need to mesh only with other estimates—their integrity is key to building support for a program that some believe isn’t worth the cost.

So what happened?

“It occurred in part because of human error,” Air Force Secretary Deborah Lee James said Monday. “And in part because of process error, meaning a couple of our people got the figures wrong and the process of coordination was not fully carried out in this case.”

Those who erred have been “counseled,” James said. “The key thing is there has been no change in those cost figures.”

In other words, that recent $41.7 billion estimate is rock solid, at least for now. As they say of the nuclear weapons the new bomber is being designed to carry: close enough.