Defending LRS-B

Air Force Secretary Deborah Lee James staunchly defended the Air Force’s acquisition strategy for the B-21 Long-Range Strike Bomber, clearly anticipating push-back from Senate Armed Services Committee Chairman Sen. John McCain, who has threatened to do what he can to block the cost-plus contract award. “Experience tells us that there is no one-size-fits-all when it comes to acquisition contracts and strategies, because … we have certainly examples of cost-plus failures, but there also have been cost-plus successes,” said James on Thursday. “Likewise, we have had some successes in fixed-price work, but there’s also been some noteworthy failures …? to include A-12, the Tri-Service Standoff Attack Missile, the C-5, the future combat system, and the C-17.” The contract awarded to Northrop Grumman, which the Government Accountability Office upheld following a protest from rival contractor Boeing, uses a “mix of contract types” that were “specifically chosen to capitalize on the advantages” of each, “while limiting the potential risks for cost growth and/or performance issues,” said James. Engineering and design of the new bomber is cost-plus, representing about 30 percent of the total contract amount, while 70 percent is a fixed-price contract, said James. “It’s a shared-risk situation and the bulk of the incentives are geared toward the tail-end of the EMD, which gives the contractor the incentive to go as quickly as possible” to production, she added. (See also: In Defense of Cost-Plus.)