🔷 Nuke Missile $oars

Sentinel Struggles

The Air Force’s Intercontinental Ballistic Missile (ICBM) program, known as the LGM-35A Sentinel, has faced a significant surge in costs, sparking scrutiny and concern within the Pentagon and beyond.

What

The Sentinel ICBM is replacing the aging LGM-30G Minuteman III ICBMs, a three-stage, solid-fuel missile that carries up to three independently targeted Mk 12A nuclear warheads. The Minuteman was designed in the 1960s, deployed in the 1970s, and only expected to operate into the 1980s. It’s now been in service for 54 years (and counting) and is forecasted to be replaced in the early 2030s.

In 2020, Northrop Grumman received a $13.3B contract for Sentinel’s engineering and manufacturing development phase for what was originally a $85B program. This program estimate was revised to $96B based on another assessment and an accelerated production of missiles.  

WTF

Earlier this year, the Air Force notified Congress that the program had ballooned to $131B…but the missiles themselves are on cost and schedule.

The explosion in cost stems from not critically analyzing everything else required to modernize the ICBM capability: enlarging 450 underground missile silos and installing a whopping 7,500 miles of fiber optic cables to connect 600+ facilities spread across 40,000 square miles—details not realized until after the contract was awarded. Shockingly, the Air Force didn’t even make a silo available to Northrop to analyze for engineering estimate calculations in the proposal—they were forced to build their own mock-up silo that had differences from the real ones in service.

The cost over-run triggered what’s known as a Nunn-McCurdy breach, which forces the Pentagon to notify Congress, perform a rigorous review, and—if it needs to survive—recertify the program is essential to national security, there are no alternatives, and the revised cost estimates are reasonable.

During this process, the Air Force fired the head of the program (though the service stated it was “not directly related” to the program’s cost crisis).

What Now

Last week, the Pentagon recertified the program and released the re-re-revised cost: $141B.

For a few reasons, don’t expect that $141B program estimate to stick.

For starters, the Air Force has already said the program restructure is expected to take 2 years to sort out and will produce a new program baseline that is likely to vary from the quick assessment that was just completed. The $141B cost estimate only has a 50% confidence level.

Why: no one really knows how much it will cost. It’s arguably the biggest project in the history of the Air Force because it includes missile production, wide-scale real estate development, civil engineering, and the creation of both a massive communications network and nuclear war-resilient command-and-control infrastructure.

Any small cost change to a single missile silo is instantly magnified by 400+ locations.

And unlike when these missile fields were first constructed 60+ years ago today, they have to deal with a mountain of stringent regulatory and safety standards—think land surveys, environmental analysis, and even property appraisals to seize private property for the related infrastructure.

BOLO

The Air Force will be solely responsible for finding the $45B in additional funds the Sentinel will require—for now.

There is an effort in Congress to move the Sentinel off the Air Force’s books and into its own special type of funding item, which makes complete sense and should be done ASAP—and there is precedent. There is a reason this proposal is called the National Land-Based Deterrence Fund.

Since 2014, the Navy has had this in place with its nuclear submarines in what’s called the National Sea-Based Deterrence Fund. This was created to insulate the Columbia-class nuke sub program’s costs from its other shipbuilding accounts and encourages the Pentagon (and Congress) to move money from across the entire DoD to help fund nuke subs—including the Air Force.

It’s now come full circle. Big programs require big commitments and the money has to come from somewhere. The good news is there’s time to sort it out: the $45B in additional money won’t start to kick in until ~2029.

One thing is crystal clear though: This is going to be a case study in all future acquisition courses.

In That Number

15,000th

F-15E tail number 89-0487 logged its 15,000th flight hour—which is insanely high for a fighter jet. Shout out to all those maintainers working miracles every day!

TRIVIA

How many ships in the US Navy are authorized to fly a pirate flag?

A) none
B) 1
C) 5
D) all

On the Radar

Japan’s defense buildup is being knee-capped by a weakened yen. ICYMI, this year, the yen collapsed to a nearly four-decade low. This matters because a ton of what Japan buys is from America and in transactions with US dollars. As the yen weakens, so does its buying power.

• The Merge’s Take: In 2022, Japan announced an ambitious 5-year plan for its largest military buildup in postwar history, a move that would make it the third-largest military spender in the world. But just 2 years into execution, the yen situation has already triggered scaled-back orders for aircraft, and it’s likely to get worse. Right now, roughly 30 percent of Japan’s defense budget buying power has been eroded. Keep an eye on this—either the defense budget will change, or the plan will.

Poland & Ukraine signed a security agreement to integrate Ukraine’s defense industry and coordinate air defenses.

• The Merge’s Take: As we discussed on our podcast (episode 36), Ukraine’s rapidly rising defense industry is a massive untapped resource and will be both disruptive and transformative to Western defense industries once the war ends and Ukraine lifts its export ban. The pace and cost that they are innovating is unmatched. If you’re a US defense company and aren’t trying to figure out how to partner with a Ukrainian company that does similar work, you’re probably behind. US drone-maker Skydio knows this, which is why they are establishing a presence in Ukraine.

F-16 fighters will start operations in Ukraine this summer. The jets are coming from Denmark and the Netherlands, although the number of jets is undisclosed. On the heels of that announcement, NATO is also sending a massive influx of acronym-laden air defenses: Patriot batteries, a SAMP-T system, NASAMS, HAWKs, IRIS T-SLM, IRIS T-SLS, and Gepard systems.

• The Merge’s Take: Expect 6-16 jets, but how effective they will be depends entirely on how they’ll be used and what they will be equipped with. Expect the Vipers to conduct operations through either extreme stand-off (western airfields) or stand-in maneuver warfare (central airfields)…and expect Russia to surge an annihilation campaign to counter it once they deduce which of the two force laydowns is in play. One thing’s for sure: regardless of tactics or strategy, when the 1^st F-16 gets destroyed expect the talking heads to come out in full force on both sides of the argument.

They Said It
“I would like to create a Lithuanian hedgehog, which could be so strong [that it would be] uncomfortable for bigger Russia to swallow.”

— Laurynas Kasčiūnas, Lithuania’s Minister of National Defence, on announcing a $123m Mobile Short Range Air Defense (MSHORAD) order from Saab

Knowledge Bombs

• NATO announced Ukraine is on an ‘irreversible’ path to join the alliance…but only after the war with Russia ends

• NATO agreed to spend another $40B in weapons for Ukraine

• The Pentagon resumes F-35 deliveries with a partial TR-3 software solution after a yearlong pause

• Jordan could possibly receive surplus A-10 Warthogs

• The Air Force is going to rapidly develop and deploy an Extended Range Attack Munition (ERAM) for Ukraine

• AeroVironment sold Switchblade 300s to Australia, becoming the country’s first loitering munitions

• Japan is putting AGM-158B JASSM-ER stealth cruise missiles on their F-15J fleet

• J2 Ventures raised $150m for a new fund to support defense tech startups

• Air Force test pilots started flying the first OA-1K Sky Warden light attack planes

🎁Earn Free Merch!🎁 

Hey. Don't keep us a secret!
Share the Merge = earn free swag. It's that simple.

You currently have 0 referrals, only 3 away from receiving Stickers.

Or copy and paste this link: https://themerge.co/subscribe?ref=PLACEHOLDER

ANSWER
B) The USS Kidd, an Arleigh Burke-class guided missile destroyer, is the only Navy ship authorized to fly the infamous skull and crossbones Jolly Roger flag. It’s a tradition that started after Admiral Kidd was killed at Pearl Harbor. Unofficially, US submarines occasionally fly the flag—a tradition dates to the British in WWI.