Stealth Program Should End, Says Ex-Defense Official

Robert B. Costello, who last week stepped down as the Pentagon’s chief of procurement, said Thursday that he attempted unsuccessfully to kill the B-2 stealth bomber program over the past year because of spiraling cost, poor quality and bad management at Northrop, the prime contractor.

“I have serious and grave concerns,” he said in an interview. “The quality issues on the B-2 are a significant concern to me.”

Costello’s comments are likely to exacerbate Northrop’s problems in keeping the B-2 program on track. Even though Costello’s effort to kill the B-2 was overcome by strong support in the military, it reveals significant opposition at the highest levels of the Defense Department. The criticism about Northrop quality also may renew past concerns about its performance on other major weapons systems.

The B-2, which is being produced at Northrop plants in Pico Rivera and Palmdale, is the most important program at the company and accounts for 51% of the firm’s revenue. The comments come at a time when the program has entered a period of intense examination.

Defense Secretary Dick Cheney and Deputy Secretary of Defense Donald Atwood are scheduled to visit Northrop next Friday to examine the program. Cheney already has decided to delay full-scale production by a year and critics are calling for further delays to provide for increased testing before production.

Northrop officials have been vigorously defending the program in recent weeks, although no significant opposition had emerged publicly. Company officials could not be reached for comment Thursday on Costello’s remarks.

But at the firm’s annual shareholders meeting Wednesday, Northrop Chairman Thomas V. Jones said the “unprecedented technical successes” of the B-2 will eventually be realized, once the aircraft flies. It is scheduled to make its maiden flight this summer, about a year and a half behind its original schedule. Jones called the B-2 an “extraordinary new aircraft system” and said there are no “show stoppers.”

Northrop has asserted in the past week that the aircraft has had little cost growth from earlier projections. Jones said the aircraft will cost $265 million each. That figure does not include the research and development costs, future inflation and ground equipment that the higher figures include.

Technical Problems Cited

But Cheney has said there are technical problems on the aircraft and he wants to slow down the program for that reason and because the Pentagon is facing budget constraints.

Indeed, Costello said Northrop began to pay attention to quality concerns only last November, when it instituted a plan to improve its management on the program. Until the results of that effort are realized, there remain major uncertainties, he said.

Costello said his concerns were based on cost problems on the program, as well as quality and management performance concerns. A confidential internal cost analysis conducted by Costello’s office earlier this year found that the bomber’s cost had soared to $750 million per aircraft, far higher than more recent estimates, members of Costello’s staff told The Times on Thursday.

“You finally get down to economics, how much can you afford to put into it on a per plane basis,” he said, noting that the aircraft is nearly as expensive as Navy submarines.

Confrontational Meeting

Costello recommended to the Defense Resources Board, a high-level Pentagon panel that approves major weapons funding, that the B-2 be killed in early 1988, according to Pentagon sources. Costello’s staff had even prepared a briefing chart that pictured the B-2 in gold with a legend asking, “The B-2, worth its weight in gold?” The chart was never used in the briefing, but it is now part of office lore.

In mid-1988, Northrop Chairman Jones came to Costello’s office to defend the B-2 program. “Jones came in and they had a very confrontational meeting last year,” a Costello aide said. “They were really yelling at each other.”

Costello said he had more than one heated meeting with Jones.

Costello’s efforts to kill the program were unsuccessful, he said, because other powerful voices in the Pentagon bureaucracy did not support his position. Specifically, the Joint Chiefs of Staff insisted that only the B-2 could fulfill the mission of penetrating Soviet Union air defenses and hold Soviet targets at risk.

Sources familiar with the politics of defense procurement said Costello was mistrustful of Northrop’s capabilities, based on the Pentagon’s experience with the MX missile guidance system. They also said that he did not get along well with Jones.