HASC Chairman: Single-contractor bid for new ICBM is ‘troubling’

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Smith said he offered to help Boeing but the company wasn't interested.

WASHINGTON — Competition in government contracts is always desirable, and even more so in a big-ticket procurement like the Air Force’s next-generation intercontinental ballistic missile, House Armed Services Committee Chairman Adam Smith (D-Wash.) said Oct. 24.

Smith said he is troubled that only one company, Northrop Grumman, will be bidding for the Ground Based Strategic Deterrent, a program to replace the Minuteman 3 ICBMs that make up the ground-based portion of the nation’s nuclear forces.

Northrop Grumman and Boeing were expected to compete head to head to be GBSD prime contractors but Boeing decided in July it would not submit a proposal because of Northrop’s overwhelming advantage as the nation’s largest manufacturer of solid rocket motors.

“It is very troubling that it is going to be a sole source contract,” Smith said at an event hosted by the Ploughshares Fund, a global peace and security foundation.

Smith recognized it was not necessarily the Air Force’s fault that Boeing bowed out of the competition. Boeing had concluded that it faced an insurmountable disadvantage because of Northrop’s dominance of the solid rocket motors market following its acquisition of Orbital ATK in June 2018. In GBSD, more than half the price of the missile is solid rocket motors, and they account for 25 to 30 percent of the total weapon system cost. Boeing asked the Air Force to change the procurement strategy and even went as far as to demand that the Air Force compel Northrop to include Boeing in its team. But all those requests went unanswered.

Smith said he takes Boeing’s account of events “at face value” but also blamed the Air Force for mismanagement of the competition. “It is actually documented that the Air Force at one point accidentally shared proprietary Boeing information with Northrop,” said Smith. “As a side note, I am not fond of the Air Force’s procurement process.”

He mentioned the National Security Space Launch program as another example he believes shows the Air Force does not treat all competitors fairly. “I have worked with them on launch and other things and it strikes me that they are way too close to the contractors that they’re working with,” he said. “They seem to show bias,” Smith added. “It could be incompetence. But I think it is more likely that they like their historical partners. This is really, really bad because competition is a good thing.”

The Air Force has strongly denied it favors any particular suppliers. But Smith doesn’t buy it. He has been a long-time critic of the space launch program and has introduced legislation that would require the Air Force to select more than two competitors in the upcoming Air Force launch procurement. Smith has criticized the Air Force for favoring its longtime supplier United Launch Alliance over new players like Washington-based Blue Origin.

“The way they handle the ULA relationship at the expense of emerging competitors is costing the taxpayers an enormous amount of money and denying us the ability to benefit from competition,” he said.

Smith worries that GBSD could end up costing far more than originally estimated because there will not be a competition, he said. GBSD is an estimated $63 billion 20-year program to replace more than 400 aging ICBMs. Several lawmakers including Smith have called for a reduction in the number of missiles or even for the termination of GBSD but their arguments are outweighed by overwhelming support for the program in the Senate and the White House. The Air Force said GBSD proposals are due Dec. 13 and has declined to comment on any specifics.

Smith said he has talked to Boeing executives about possibly getting the company back in the GBSD competition but the company “wasn’t open to it.” Boeing said the process wasn’t fair, Smith added. “We offered to find ways to address that and Boeing didn’t want us to.”

In the long term, said Smith, “We’re going to revisit the conversation for next year’s NDAA [National Defense Authorization Act] and see if we can get Boeing to work with us to figure out how we create the right procurement process.”

The Air Force, meanwhile, moved to terminate Boeing’s GBSD development contract. In an Oct. 21 statement, Boeing said it is “disappointed in the Air Force’s decision to not allot additional funding for the GBSD Technology Maturation and Risk Reduction contract.  Continuing Boeing’s TMRR contract would advance the Air Force’s objectives of maturing the missile system’s design and reducing the risk for this critical national priority capability.”