The B-21 bomber is a “good business deal” for Northrop Grumman, but the details of the deal are still being worked out, Pentagon acquisition, technology, and logistics chief Frank Kendall said Tuesday. Bidding on the bomber was “very aggressive,” he said, and the reason “it took so long” to award the contract was because the Pentagon wanted to make sure it was “comfortable” with the risks being taken, and those discussions are apparently still ongoing. A good deal, he said, is one in which “the Department gets a product we need at a reasonable price,” and the contractor gets a “reasonable return” but can do so “without betting the company.” Kendall said he thinks the Pentagon accomplished that goal with the B-21. Though some on Capitol Hill are demanding that the whole program be fixed-price, Kendall noted that there was a “fad” of fixed-price contracting in the 1980s, and it produced spectacular and expensive failures. Kendall said he’s had to spend a lot of time “cleaning that mess up.” Military contracting is not like commercial contracting, he said, and cost-plus—in certain phases of a program—makes sense because it gives the Pentagon “flexibility” in being able to adjust schedules or requirements without breaking the contract. The bomber will be mostly fixed-price, but those stages that are cost-plus provide heavy incentives for Northrop Grumman to hit schedule and cost targets. “Incentives work,” Kendall said. “We get what we reward.” (See also Why a Cost-Plus Bomber.)
U.S. Air Force F-35s and F-22s regularly deploy deep into the Pacific region from Alaska, Utah, and Hawaii. In the future, though, the head of U.S. Indo-Pacific Command would like to see the Air Force permanently station fifth-generation aircraft west of the international date line—closer to China.