WASHINGTON — Sen. John McCain was unhappy.
The Republican from Arizona summoned the Air Force’s top leaders to appear before the Senate Armed Services Committee in early March 2016, a little more than four months after the service awarded Northrop Grumman a much-watched deal of undisclosed value to build the next stealth bomber.
As the committee chairman at the time, McCain let then-Secretary Deborah Lee James and then-Chief of Staff Gen. Mark Welsh know in no uncertain terms he was displeased with the service’s handling of several key aircraft programs. At one point, his tongue-lashing of Welsh over the A-10 aircraft grew so severe it went viral.
During that same hearing, McCain turned his attention to what would soon become the B-21 Raider. He was frustrated over the service’s acquisition strategy for the stealth bomber — particularly the way the Air Force had structured its contract — and the secrecy of the program’s classified budget.
“I’m still not convinced that this program will not repeat the failures of past acquisition programs, such as [the] F-35,” McCain said.
Following a dramatic unveiling of the B-21 bomber in California on Dec. 2, 2022, former Air Force leaders are holding a muted celebration. By moving from contract award to public rollout in seven years, they said in interviews with Defense News that they proved their acquisition strategy — despite McCain’s criticism — worked.
Better yet, they said, their unexpected approach might provide best practices for other major programs and serve as an antidote to the beleaguered development of the F-35 Joint Strike Fighter in the 1990s and 2000s.
Their secret? They learned how to limit bureaucracy.
“There were fewer checkers checking the checkers,” James said. “Don’t ever underestimate the ability of the Pentagon bureaucracy and these many, many reviews to slow the doggone thing down.”
Most notably, officials point to the unusual move to put the Rapid Capabilities Office in charge of the B-21′s development. That office had a narrowly focused team of skilled, experienced engineers and program managers, a board of directors to hash out key decisions and reviews, and an ability to cut through red tape, James said.
Will Roper, who served as the Air Force’s assistant secretary for acquisition, technology and logistics from 2018 to 2020, said there were plenty of program skeptics.
“No one would have thought the B-21 would have finished on time, on cost,” Roper said in an interview with Defense News. “But that’s an amazing thing to say. It did not finish on time [and] on cost because there were no issues [and] no technical challenges; there were, there was just a more flexible process for dealing with them. And if you give smart people time to solve problems, statistically, they do.”
Consider how the conversation around the B-21′s acquisition had changed about five years after McCain’s hearing, in April 2021, when House Armed Services Committee Chairman Rep. Adam Smith, D-Wash., publicly praised it.
Smith — like McCain, no light touch when it comes to troubled defense acquisitions — said at a think tank event that a briefing he had just attended on the program was “one of the most positive, encouraging things” he had recently seen.
“They learned the lessons from the F-35,” Smith said. “They were actually on time, on budget. They’re making it work in a very intelligent way.”
Andrew Hunter, the Air Force’s assistant secretary for acquisition, technology and logistics, said in a June interview with Bloomberg that the B-21 was under budget, with cost estimates coming in below the $25.1 billion the service had projected.
Even so, Dan Grazier, a military analyst for the watchdog group Project on Government Oversight, said it’s too early for a victory lap. The first B-21, revealed at Air Force Plant 42 in Palmdale, had only gone through early ground tests and did little more at the rollout than get towed forward slightly for photographs.
Northrop Grumman will conduct more in-depth ground testing of its Raider in the coming months before the bomber is deemed ready for its first flight to Edwards Air Force Base in California, expected in 2023, and then undergoes formal flight tests.
“It’s easy for people to make claims that the acquisition process worked well in the case of the B-21 at this point because it hasn’t flown yet,” Grazier said. “We’re not really going to know that until it flies, for one, and then when it goes through operational testing. That’s when we’ll know if the acquisition process actually worked.”
The warning of the B-2
As the Air Force started to work on developing the B-21, James said, officials kept the B-2 bomber in mind as something of a cautionary tale. Costs on the B-2 “spiraled out of control” during its development in the 1980s, she said, which led to the Spirit program getting considerably truncated. The Air Force ended up buying 21 B-2s, a fraction of the 132 it originally sought.
The service focused intensely on keeping the average per-unit cost of the B-21 at $550 million in 2010 dollars, which is now $692 million with inflation, James said. That kept Northrop’s eye on holding costs down and not letting them balloon, she added.
The B-21 is so classified, however, that nearly all budget figures are hidden. It’s difficult to publicly track how well it is staying within its costs, aside from listening to occasional comments from lawmakers who were briefed on the program.
James noted the type of contract — a cost-plus incentive fee structure, with Northrop’s incentives dependent on how well it stuck to cost and schedule — also helped, although it raised McCain’s ire.
In that March 2016 hearing, James acknowledged other programs that used a cost-plus structure, including the F-22, F-35 and B-2, had serious cost and schedule slippages. But, she told McCain, the Air Force learned from those mistakes and designed the B-21 contract differently — for example, structuring the majority of the incentives toward the back end of the cost-plus phase, which she said would encourage Northrop to move quickly and efficiently.
James and her successor, Heather Wilson, told Defense News that the Air Force’s decision to have the Rapid Capabilities Office take charge of developing the B-21 was a critical step in its acquisition process.
The Air Force created the Rapid Capabilities Office in 2003 to quickly develop, acquire and field some of the service’s highest-priority programs — many of which were classified, such as the X-37B Orbital Test Vehicle. The RCO is intended to take advantage of innovative approaches, “without the rigidity of traditional acquisition,” the Air Force said in an online fact sheet about the office.
The B-21 was a much larger program than the RCO typically managed, Wilson noted, but it worked. The office’s team on the B-21 was unusually slim compared to other programs, and it included some of the Air Force’s most experienced engineers and program managers. Most importantly, she said, they were trusted to use their judgment and go fast, without micromanagement.
“It was run very differently from other programs,” Wilson said. “You get high performers in the [RCO] program office, and you don’t crush their will to live with huge bureaucracies. … I think it’s a good example of how to do major programs better.”
Wilson said the team was kept so small that Randy Walden, the RCO’s program executive officer at the time, wanted the B-21′s program management team to fit into no more than three vans when making regular visits to Plant 42.
The Air Force declined Defense News’ request to interview Walden and other officials on the acquisition process; Northrop Grumman also declined interview requests.
The RCO reports directly to a board of directors consisting of top Air Force officials — including the service’s secretary, chief of staff and top acquisition executive, allowing a more streamlined system of reviews, James said. By having top officials around the table at the same time, the oversight board could simultaneously conduct and approve milestones such as preliminary and critical design reviews.
For other programs, these reviews are considered sequentially, moving from one office to another. This, James explained, leads to the process taking months longer.
“We were all there together” to hash out decisions on the B-21, she said. “It didn’t require one review by the acquisition executive, and that guy maybe had some questions and changes, and a month or two would go by. And then it would go to the chief of staff, and he’d have more changes and questions, and maybe four months would go [by], and then it would come to me. That eats up precious time when you do it that way.”
Roper said having officials ranging from acquisition experts to fighter pilots in the same room doesn’t just make the process quicker, but also more fruitful.
“There’s not a single thing that I can do in the acquisition world, when I was the Air Force and Space Force weapons chief, that can be done in isolation from the warfighter’s requirement, represented by [the former and current chiefs of staff] Gen. [Dave] Goldfein and Gen. [CQ] Brown in the room,” Roper said. “Everything you need is there. This allows faster collective decisions, much like a commercial company’s board of directors.”
Wilson said other acquisition programs could benefit by following the example of the RCO’s streamlined structure. When too many people are involved in a program, she added, it can be hard to come to a consensus and make a decision, move quickly, and build the right relationship with the contractor at the appropriate levels.
The RCO reports directly to the secretary of the Air Force, which Wilson said allowed its leadership to enjoy virtually open-door access to her and other secretaries when key decisions needed to be made on the B-21.
“There are not too many people who had walk-in rights to the secretary of the Air Force, but Randy Walden was one of them,” Wilson said. “All he needed to do was call and say: ‘I need five minutes.’ ”
Wilson described one instance, which she thinks occurred in 2018, when Walden visited her office to discuss a potential issue he had spotted early in the project’s engineering phase.
Northrop Grumman had underbid to get the B-21 contract, Wilson said Walden told her. The contractor could make it work within those cost limits, he told Wilson. But the Air Force would be better off in the long run if it increased the budget and gave Northrop more time on the engineering and design phase to head off problems down the road, Wilson said Walden told her.
It was an unusual request, Wilson said, but she signed off on the increase. It was the right thing to do, she explained — not because Northrop wasn’t performing properly, but because it would help the program over time.
“I’d been there long enough to trust Randy Walden’s judgment,” Wilson said, adding that the anecdote is an example of how the RCO built a constructive working relationship with Northrop Grumman.
Wilson declined to go into further detail on the change she approved for the B-21′s budget, which is still highly classified.
‘Most precarious’ days ahead
James said the B-21′s development process benefited from the decision to primarily rely on relatively mature technologies — such as avionics, some stealth tech and a variety of sensors — as opposed to creating key systems from the ground up.
For example, she said, some sensors were developed in the “black,” or classified world, though she would not offer more information due to the secrecy involved. That’s not to say the technology going into the B-21 wasn’t cutting edge, she added, or that no new technologies were made for the aircraft.
“Although the airframe itself was new, the actual technologies that are the secret sauce of the B-21 were pretty mature at the time,” James said. “So it became more of an integration situation than a completely brand new development of all these capabilities. Not to sneeze at integration challenges — that can be plenty hard — but it’s easier than starting everything from scratch.”
The Air Force also kept the requirements for the B-21 stable. “So often these things get off track when requirements are constantly changing,” James said. “The deal was, if anyone thinks they need to change a part of the requirements of the B-21, it’s going to have to go up all the way to the top, to the chief of staff of the Air Force to make that case and get a change.”
James and Wilson noted the B-21 used open-systems architecture, building in from the start the ability to upgrade core systems over time.
“We’re going to use what we have and get this [plane] up there,” Wilson said. “But we are going to have a plug-and-play [setup]. And then as technology develops, we can incorporate new technologies into this airframe without being over the barrel with only one supplier.”
But before a verdict on the B-21′s success can be delivered, the aircraft most go through operational testing later this decade, according to Grazier of the Project on Government Oversight.
“My primary concern in any acquisition program is how effective it is,” he said. “Once it does start to fly and once it goes into operational testing, [it’s] making sure that it not only meets its contract specifications, but that it’s actually suitable and effective in the hands of actual warfighters.”
And as more details of the program’s costs emerge, it will be easier to see if those costs start to grow, he added.
“If costs keep going up and up, you know that program is having a really hard time delivering the goods from a performance standpoint,” he said.
Todd Harrison, a defense budget expert and managing director of Metrea Strategic Insights, agreed that it’s too soon to declare success for the B-21, noting that the program’s most perilous days are still ahead.
Because the program is so highly classified, Harrison told Defense News, it’s unlikely the public will learn of problems, like the B-21 failing to meet certain criteria in tests. The biggest sign of potential problems, he said, will be schedule delays in the testing process.
If the B-21′s first flight, now slated for 2023, gets pushed back, he explained, that could be a sign something was uncovered in the ground testing process. Or if the first flight happens but a second flight does not for a long time, he said, that might show officials found something wrong the first time they took it up.
“This is absolutely the most precarious part of an acquisition program, when they try to make the transition out of design into flight tests,” Harrison said. “That’s where you’re likely to uncover unexpected performance issues. That’s the whole point of testing.”