Cost Estimates for B-1B Aircraft Program

The cost estimate for the B-1B aircraft program was reviewed by independent teams from the Air Force and the Department of Defense (DOD). The results of these independent estimates were available to DOD before a November 4, 1981, directive concerning the management of the B-1B program was issued. Despite the controversy surrounding the estimated cost of the B-1B program, GAO believes that the Air Force and DOD are making a concerted effort to acquire the B-1B program within its estimated cost baseline of $20.5 billion. Both of the independent teams felt that the baseline estimate was optimistic. However, Air Force officials believe that the baseline estimate is justified by experience with an earlier program. GAO has been concerned with the exclusion of certain program costs from the B-1B baseline. Those costs which involve necessary aircraft components could add up to over $1.4 billion. GAO believes that excluding these costs from the B-1B baseline provides poor visibility of the program acquisition cost as well as annual funding requests. GAO feels that Air Force and DOD guidance on establishing program baselines needs to be improved to provide uniformity in establishing baselines and reporting them to Congress.