Yesterday afternoon, Defense Secretary Ashton Carter, Air Force Secretary Deborah Lee James and Air Force Chief of Staff Gen. Mark A. Welsh III announced that Northrop Grumman had won its bid to be the builder of the Long Range Strike Bomber (LRSB), the Air Force's replacement for its aging B-52 and B-1 bomber fleets. The initial $21 billion contract could end up bringing Northrop $80 billion over the next decade.

The LRSB is a key part of the Air Force's modernization plans—the B-52 fleet is made up of aircraft that are over 50 years old, and the B-1 aircraft are over 20 years old. "Building this bomber is a strategic investment in the next 50 years and represents our aggressive commitment to a strong and balanced force," Carter said, before turning the announcement over to the Air Force leaders (DOD video of the announcement is available here). "It demonstrates our commitment to our allies and our determination to potential adversaries, making it crystal clear that the United States will continue to retain the ability to project power throughout the globe long into the future."

The initial $21 billion contract is for engineering and development of the LRSB. The second phase of the contract is a series of options to buy the first five production lots of the resulting aircraft—the first 21 bombers out of a projected final fleet of 100—at a cost of no more than $550 million per bomber (in 2010 dollars), though the initial cost per aircraft under Northrop's proposal is $511 million.

The LRSB program's specifications are aimed at keeping development costs under control by focusing on using only "mature" technologies, focusing on innovation in their application rather than going for moonshot-like new capabilities. And the reason for that constraint is the last bomber program won by Northrop—the B-2 Spirit stealth bomber.

Northrop's Spirit bomber program was cut short in part because of the end of the Cold War but also because of massive cost overruns, with the company eventually delivering only 21 out of an originally planned 132. That program cost an estimated $44.75 billion—about $2.13 billion per plane. Over half of that cost per plane was sunk development costs. Though the "flyaway" cost of each aircraft (what it cost to actually manufacture and deliver each plane once development was done, excluding all the development costs) was advertised at $566 million per aircraft, the GAO reported the actual cost per aircraft (with the inclusion of software and spare parts) was $929 million. And even after delivery, the planes remained the most expensive to operate in the Air Force; maintenance, including keeping the aircraft in special air-conditioned hangars to protect their "low-observable" skins, runs about $3.4 million per month, and the planes cost $135,000 an hour to fly.

Little is actually known about the aircraft proposed by Northrop other than a conceptual drawing and hints dropped by the company in its Super Bowl ad last year that it will be a "flying wing" design evolved from the B-2 and Northop's X-47B stealth Navy drone design. The design is likely to build on the technology developed by the company for both aircraft and the lessons learned from the B-2's shortcomings.

Northrop beat out a joint proposal from Boeing and Lockheed Martin. There was some speculation prior to the award by analysts that Northrop would get the bid primarily to help keep the company's industrial base afloat—Boeing has a current tanker contract, and Lockheed is lead on the F-35 Joint Strike Fighter. Air Force officials said yesterday that balancing contracts played no role in their decision. But the award, because of its magnitude, will likely face a flurry of protests from Boeing and Lockheed, as well as heavy political opposition in Congress. The Air Force's previous math error on the LRSB program, which misstated the 10-year cost estimate as almost half of what it actually was projected to be, has already set Sen. John McCain (R-Ariz.) on edge.