Air Force Challenges Pentagon Cost Estimate of Next-Generation Nuclear Missiles

More work needs to be done before the Defense Department can accurately estimate the cost of modernizing the nation's arsenal of intercontinental ballistic missiles, Secretary of the Air Force Deborah Lee James said Sept. 7.

The Pentagon's Cost Assessment and Program Evaluation Office recently projected that the ground-based strategic deterrent program, known as GBSD, would cost at least $85 billion in the coming decades, according to Bloomberg News. That number is $23 billion higher than the latest estimate put forth by the Air Force. The large discrepancy was partly the result of differing methodology and assumptions about various facets of the program, James told reporters during a media roundtable at the Pentagon.  "The CAPE used one program and extrapolated forward. We used a variety of components of programs and extrapolated forward to build up our estimates," she said. "We had certain assumptions about efficiencies in manufacturing, CAPE had different assumptions about efficiencies in manufacturing. And there was probably 15 other different assumptions as well." The latest estimates may not be reliable because they are based on antiquated data, she said. 

"The difference in the cost estimates basically, fundamentally comes down to: We have not collectively done a cost estimate of this type for probably more than 40 years," she said. "The data that everybody is using to try to build up these cost estimates is somewhat dated simply because we haven't done it in so long." James expects the projections to change as more information is gathered. 

"As we go forward, as we get the proposals back from industry, this will inform what I believe will be refinements in that cost estimate over time as we learn more," she said. "The point is, if you haven't done it in 40 years you need to refine it as you go along." Lockheed Martin, Boeing and Northrop Grumman are all vying to build the next-generation of ICBMs. James voiced optimism about the program, despite concerns about the price tag. 

"It's an important program," she said. "We're going to work through this. There's just no question in my mind." The project has already reached an important milestone, with the request for proposals from industry having been released in July, she noted. 

"We're moving ahead and we will work through these different cost estimates. And then whatever the cost estimate will be, we will put it into our five-year defense plan" at the end of this year, she said.

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