Summary
- Northrop Grumman secured a higher cost ceiling for 19 B-21 Raiders.
- The company initially lost over a billion dollars on the first B-21 Raiders due to a fixed-price clause.
- B-21 Raiders are expected to replace B-1 Lancers and eventually B-2 Spirits, with the latter undergoing mid-life upgrades.
Northrop Grumman has successfully negotiated a higher cost ceiling on the next 19 B-21 Raiders it will produce for the US Air Force. The company bills the strategic stealth bomber as the world’s first sixth-generation military aircraft. The B-21 program is currently under budget, with the United States Air Force requesting $2.7 billion for fiscal year 2025, down from the $4 billion projected last year.
Higher price ceiling negotiated
In a release, Northrop Grumman said, “B-21 remains on track to meet its key performance parameter for Average Procurement Unit Cost of $550 million in Base Year 2010 dollars.” That is over $700 million dollars today, and the Air Force remains on track to purchase around 100 aircraft.
Photo: USAF
Northrop Grumman has announced somewhat cryptically that it has successfully negotiated a higher cost ceiling for the next 19 aircraft that should see the company turn a profit on the massive contract. It stated, “Final terms, quantity, and pricing beyond the first 21 aircraft are subject to negotiation. The government and Northrop Grumman have established not to exceed pricing for an additional 19 aircraft. The average not to exceed value for the subsequent lots is above the average unit price of the five LRIP lots.”
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Northrop Grumman takes initial loss on B-21 Raiders
While it is commonly thought defense contractors make massive profits on defense contracts, that is not always the case (massive losses also happen). Boeing is taking a multi-billion dollar loss on delivering the next Air Force One jets, and Northrop Grumman made a loss on the first lots of B-21 Raiders. According to reporting by Defense One, Northrop Grumman lost more than a billion on the first B-21 Raiders.
Photo: USAF
The loss was due to a fixed-price clause that forced the defense contractor to absorb cost overruns for the first five Low Rate Initial Production aircraft. While this means the Air Force will receive the first B-21 Raider cheaper than expected, it is a mistake Northrop Grumman will be loath to make again.
The Air Force’s future strategic bomber
The B-21 Raiders are expected to first replace the B-1 Lancers before replacing the B-2 Spirits. Only 21 B-2 Spirits were built, of which two have been lost to accidents, reducing the fleet to 19 operational Spirits (the second crashed B-2 Spirit was announced to be uneconomical to repair in May 2024).
The remaining 19 B-2 Spirits have been cleared for mid-life upgrades (at around $350 million each) that will likely see them fly into the 2030s.
Photo: Northrop Grumman
While the program is understandably secretive, the B-21 Raider is known to have first flown in November and has since been cleared for low-rate initial production. The Air Force stated in May 2024 that the program is proceeding well. The US Air Force strategic bomber fleet in the 2040s will be an odd sight with futuristic B-21 Raiders and 80-year-old B-52J Superfortress bombers (built in the 1950s and 1960s) operating together (although for different missions).