Analysis of Air Force Aircraft Multiyear Procurements with Implications for the B-2

by Susan J. Bodilly, Frank Camm, Richard Y. Pei

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In response to a congressional mandate that the Office of the Secretary of Defense (OSD) institute a program management initiative for the B-2 Advanced Technology Bomber Program, the OSD asked RAND to provide research and analytic support for a strategy to reduce B-2 procurement costs. This report, part of that effort, examines several past uses of multiyear procurement contracting by the Air Force to develop indicators of program stability useful in determining if a program is an appropriate candidate for multiyear procurement contracting. The report reviews the KC-10, F-16, and B-1B multiyear procurement programs regarding perceived risks, contractual arrangements to reduce or allocate those risks, and estimated cost reductions. The authors compare experiences on these procurements and then demonstrate the indicators on the B-2 program. They find that a multiyear procurement contract might allow for attractive cost reductions; however, program instability makes the B-2 an unlikely candidate for a multiyear approach.

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