On The New ICBM's Budgeting Woes and The Risks of Sole-Source Contracting (and Nuclear War)
The highly destructive thermonuclear weapon is running two years late and will now cost $131.5 billion, 37% more than expected. Northrop Grumman won the prime contract in 2020 without any competition.
Not many people know the Defense Department is building a brand new intercontinental ballistic missile (ICBM) system to replace the Cold War-era Minuteman III. The Sentinel, as it’s called, will feature more than 650 individual missiles armed with upgraded nuclear warheads carrying 300-475 kilotons of TNT. That has an explosive yield about 20-31 times more than the “Little Boy” atomic bomb the U.S. detonated on Hiroshima in 1945, killing an estimated 70,000-140,000 people.
In September 2020, Northrop Grumman, the third-largest weapon maker in the world, got the $13 billion contract to develop and manufacture the Sentinel missiles. (The warheads are being made separately under the direction of the Energy Department’s National Nuclear Security Administration.) The Defense Department estimated at the time that the missiles would have an acquisition cost of $85 billion before updating that figure to $96 billion the following month. Northrop was the sole company to place a bid after the one other viable vendor, Boeing, dropped out of the competition in 2019. The fact that just two companies had the capacity to submit proposals illustrates the recurring challenges the government faces from oligopolistic industries and supply chains.
Boeing blamed the “unfair advantage” that Northrop attained following its 2018 acquisition of Orbital ATK, one of only two U.S. makers of large solid-rocket motors, a key ICBM component. Previously the Pentagon’s long-standing ICBM vendor, Boeing had also been dealing with the fallout after two of its 737 Max aircraft crashed, a dilemma that has not escaped the once-venerated company.
With just a single bidder on the contract, many analysts and lawmakers raised concerns that the Sentinel program would be prone to delays and cost overruns and questioned whether it was worth pursuing at all. Some argued ICBMs were obsolete and far too dangerous. But the program survived the opposition. Its supporters convinced Congress that not only was a new ICBM system strategically necessary but that any efforts to postpone fielding it beyond the planned 2029-2030 start date would put the military in “unchartered territory” and require billions of dollars in extra spending to upgrade aging parts of the Minuteman III to fill the gap.
As many experts predicted, the Sentinel program is indeed well over budget and behind schedule. Bloomberg reported Friday that the new ICBM system will now have a price-tag of $131.5 billion, or 37% more than the previously expected $96 billion. That’s $162 million per missile, an increase from $118 million. It’s also running two years late. Air Force Acquisition Secretary Andrew Hunter defended Northrop and said the problems are not caused by the company’s work. (The Air Force is the branch of the military in charge of ICBMs.) William LaPlante, the Pentagon’s acquisition chief, also said the department is conducting a “robust review” to learn what caused the price increase.
The Defense Department formally notified Congress of the Sentinel’s cost hike and scheduling delay on Thursday. Such problems are by no means uncommon for major weapons programs, but the severity of the Sentinel’s price increase triggered a relatively rare infraction known as a Nunn-McCurdy breach, which requires informing Congress. The 1983 Nunn-McCurdy Act, originally responding to considerable cost overruns by the the high-profile Black Hawk helicopter and Patriot missile system, mandates reporting for a “significant breach” (at least 15% over the baseline estimate) and a “critical breach” (at least 25% over, which the Sentinel falls into).
In addition to notifying Congress, Secretary of Defense Lloyd Austin will now have to certify the Sentinel program is crucial to national security and that there is no more affordable alternative. Otherwise, it will be cancelled. That’s a highly unlikely outcome, though, given Austin previously called the new ICBM system one of the Pentagon’s most important programs. (He also is a former board member of RTX, whose subsidiary Collins Aerospace is part of Northrop’s Sentinel team.) A debate over the weapon’s future is more likely to play out in Congress during negotiations over next year’s National Defense Authorization Act.
Longtime arms control advocates are indeed starting to criticize the Sentinel program in light of the latest news. Rep. John Garamendi (D-CA) a leading skeptic of the new ICBM system’s necessity and affordability on the House Armed Services Committee (HASC), said in a press release: “Unfortunately, my concerns have proven to be well-founded. We must reassess our nuclear posture and conduct a comprehensive review of our nuclear enterprise.” And Joseph Cirincione, former president of the nuclear nonproliferation foundation Ploughshares Fund and HASC staffer, told us:
“The new ICBM is a weapon we don’t need, can’t afford and will never use. In a classic bait-and-switch, the missile will now cost 37% more than what the contractor promised when the Trump administration rammed the project through in its last few months in office. Despite the pleas of watchdog groups, neither the Obama, Trump or Biden administrations ever seriously examined cheaper alternatives to this missile, such as refurbishing existing missiles or eliminating this over-kill capacity entirely.”
Critics will face an uphill battle, however. Northrop has a prolific political donation and lobbying machine. It spent more than $10 million on lobbyists in 2023.
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