Why The B-52 Got $11.9 Billion

DoD Buzz ^ | 10/7/2010 | Colin Grant

[ErnstStavroBlofeld]

When the Air Force announced an $11.9 billion sustainment contract to Boeing last week for the venerable and enduring B-52 eyebrows shot up along the Potomac, especially on Capitol Hill.

It appeared to provide roughly $127 million per airplane spread out over eight years, one hell of a lot of money for a plane that originally cost $9.3 million in 1955 (somewhere around $76 million per in current dollars). So we checked with the Air Force to get some details on just what was happening and why.

Congressional aides were flabbergasted by the contract, for which no money has been authorized and almost none obligated. When I shared the Air Force response with some congressional aides they were not happy since I got an answer more quickly than they did. One of them put it this way: “I can’t validate or comment yet on what you’ve been given, other than the fact that it’s “ops normal” on how the Pentagon chooses to interact and engage with the Hill.” (There were also a few choice words about how “dysfunctional” the legislative affairs office at the Pentagon is, but we won’t go into that.)

Here are the details on the B-52 deal. It’s an indefinite delivery/indefinite quantity (IDIQ) contract. The amount is “based on estimated costs derived from current activities and in-house estimates for future projected support requirements for B-52 modernization.” In an interesting approach, the Air Force gave the contract a “sufficient ceiling” for “programs critical to maintaining B-52 mission capability as funding is appropriated and authorized.” That

[A.A. Cunningham]

Gulf War,,,First shot...

Incorrect. Operation "Normandy", 8 AH-64As, 0238 17 January 1991.

[DJlaysitup]

“This contract has the potential to be worth $11.9 billion.
As the article points out, there isn’t that much money allocated for the contract. It will be used on an as-needed basis as things crop up.

This will cover things like the discovery of corrosion in the main wing spars, and get them repaired without having to go through a two year bid process.”

Exactly...1st...Govt. likes to set extra high ceilings on IDIQ contracts so they don’t have to always be modifying them.

2nd...Defense contractors LOVE the high ceiling because they can brag to their stockholders that they received an $11.9Billion contract - when in reality they may never see a billions-worth of business out of it.

and lastly, Govt. sometimes uses these IDIQs for fiscal year end buying of stuff which may or may not be for the original purpose. (cheating, but it happens)