US Senate Armed Services Committee leaders John McCain and Jack Reed have fired warning shots at the Pentagon over its handling of the Long-Range Strike Bomber and Boeing KC-46A programmes, with the former unwittingly reporting false long-term cost projections and the later experiencing development delays and cost overruns.
In a 26 August letter to US defence secretary Ashton Carter, the senators demand an explanation for the misreporting of 10-year LRS-B cost estimates, which jumped from $33.1 billion (2015-2024) last year to $58.4 billion (2016-2025) this year – a 76% increase. The air force recently corrected its calculations, saying the true number is $41.7 billion (an increase of 26% over the $33.1 billion figure).
Air force secretary Deborah Lee James said last week the accounting error was a “regrettable mistake” that has since been corrected, while noting the programme’s costing factors have not changed over the last two years.
The long-time senators of Arizona and Rhode Island have requested a detailed breakdown of the new $41.7 billion bomber figure, including an explanation for why it has increased so dramatically. The service wants to buy 80 to 100 next-generation bombers for about $550 million per copy, and is soon to select either Northrop Grumman or a Boeing-Lockheed team for the multibillion-dollar development contract.
“Such dramatic discrepancies in the long-term cost estimation for the LRS-B programme are difficult to understand, and unfortunately do not inspire confidence about the department’s management of this important acquisition programme,” they write. “To commit administrative errors amounting to tens of billions of dollars is simply unacceptable.”
In a separate, 28 August letter, McCain also expresses concern about the KC-46A programme, saying Boeing’s decision to press forward with early production activities “at its own initiative and cost” comes with inherent risks.
“A concurrent test and production strategy increases the risk of redesign and retrofit to address potential issues found in testing, and has potential implications for schedule and cost to both the KC-46A programme and beyond,” McCain writes. “I fully expect that, should such issues arise, the government and taxpayer would not be responsible for these additional costs and would seek appropriate consideration.”
Boeing received the development contract in 2011 for the first four aircraft, and a total of 18 operational tankers are required by August 2018 for initial operational capability. Boeing remains steadfast in its pursuit of that goal, despite twice reporting massive cost overruns due to improper wiring and problems with the integrated fuel system.
These issues, and a recent chemical mixup where the wrong substance was passed through the fuel system, have significantly delayed flight testing of the first functional KC-46A and will likely delay the government’s "Milestone C" production decision beyond the August 2016 threshold date.
“I am concerned that the recent problems with the tanker modernization programme could prevent the DOD from delivering this critical capability to our warfighters as promised and on schedule,” the letter states.