The XB-17 holds a significant place in aviation history, representing a turning point in military procurement and the evolution of strategic bombing. Its development was shaped by a complex web of government contracts, Army Air Corps policies, and the challenges of navigating military innovation within bureaucratic constraints. From the early struggles of securing funding and approvals to the eventual triumph of the Boeing B-17 Flying Fortress, the story of the XB-17 highlights the intersection of political pressure, technological advancement, and the ever-present tension between business as usual and the pursuit of progress in aerospace development.

Most people would agree that the Boeing B-17 was an outstanding World War II aircraft. It was active in many theaters of war and carried the heaviest weight of bombs in the daylight strategic bombing of Germany. Its origins and the delay in getting into full scale production provide interesting and sad commentary on military procurement in the past which resonates today.

Preliminaries

The story goes back a long way. In December 1903 the Wright Brothers successfully demonstrated manned, heavier than air flight. They spent 1904 improving their flyer in terms of speed, altitude and the ability to turn and reverse course. Beginning in early in 1905 the Wrights attempted to interest the U.S. Army in the potential of the airplane to contribute to the army’s observation or reconnaissance mission. After substantial delay the Army agreed to evaluate and possibly purchase a flying machine. Although only the Wright Brothers were expected to respond, a solicitation and specification via a notice to the public was issued in December 1907 with bids due in February 1908. Formal advertising and contract award to the lowest bidder had long been the standard way the U.S. government awarded purchase contracts. As bid security bidders were required to submit a check for 10% of their bid’s price.

Orville Wright and passeger Lt. Lahm over Ft. Myer

Instead of just the Wright’s more than three dozen bids were received. About half were dismissed as absurd. Of the remainder only three were accompanied by checks and one of those bidders requested and was allowed to withdraw. That left just two bidders. The Wrights and Augustus Herring who had studied aeronautics and worked for aviation pioneers Octave Chanute and Samuel P. Langley. Herring was low bidder. However, he did not know how to build an airplane to meet the specifications. When the Wrights refused to subcontract with him, Herring dropped out forfeiting his check. After several bumps along the road in 1909 the acceptance flight was completed. Wilbur Wright and his passenger (required by the specification) Lt. Benjamin Foulois covered the required distance at a speed that resulted in award not only of the contract price but of a bonus. After four years the U.S. Army had its Aircraft No. 1.

Fast forward about 25 years

The Air Mail Act of 1930 revised the payment methodology for commercial air mail contracts. This resulted in capacity rather than price per pound/mile being the primary criterion for contract award. President Hoover’s Postmaster General convened a meeting of companies to determine the “lowest responsible bidder” under the new criteria. The result was that airlines with the largest aircraft typically the larger airlines had an advantage. Three airlines dominated the award of the various air mail routes to the disappointment of smaller airlines. The year 1933 brought not only a new President and Postmaster General but a news story alleging the air mail contracts had been procured by collusion and fraud. By the following year this became a partisan political scandal. Congressman Hugo Black (later a Justice of the Supreme Court) was among those stoking the fire of the scandal story.  

At a Cabinet meeting President Roosevelt announced his intent to have Postmaster General Farley cancel the contracts. As how to proceed was discussed Secretary of War Dern proffered that the Army Air Corps could fly the mail until new contracts were in place. Neither Army Chief of Staff MacArthur nor Chief of the Air Corps Maj. Gen. Foulois was consulted. Subsequently upon receiving the task, Foulois said the Air Corps could be ready in two weeks. The Army became responsible for flying the air mail from February 19, 1934, to May 17th with some additional flights through the end of the month. This proved to be a disaster. In a harsh winter the Army assembled a mélange of aircraft types and pilots of varied abilities. Several commercial airline companies had formed Aeronautical Radio, Inc. (ARINC) in 1929. Passenger aircraft of the big airlines were well equipped with radios including direction finding equipment as well as a suite of flight instruments necessary for instrument flying at night or in bad weather. Air mail flights often took place during hours of darkness. In contrast Army aircraft if equipped with radios had models with only short range (30 miles or less). Not all had critical instruments like directional gyros or artificial horizons. The abbreviation I.F.R. instead of Instrument Flight Regulations was reputedly used to mean “I follow railroads.” There were sixty-six major accidents, resulting in a significant increase over the Army’s previous year’s total, and thirteen crew fatalities. This episode did Foulois no good. He was viewed as culpable in many eyes.

Keystone B-6 flying the airmail

The part about this episode that is often left out in other renditions of the story came years later. The airlines with the cancelled contracts sued in the U.S. Court of Claims. Litigation dragged on for years. In 1941 a Claims Court commissioner found that the cancelled contracts did not involve fraud or collusion. However, he also found that Postmaster General Farley had not acted in bad faith. The only remedy for the airlines was for unpaid fees for their mail transportation during January and February 1934. This was an unhappy result for all concerned. A couple years later the full Court adopted the commissioner’s findings. The airlines decided not to appeal to the Supreme Court. One possible lesson that comes from this is if you do anything other than business as usual in the government contract arena some folks, perhaps many, will assume you have done something illegal or immoral; at best maybe just weird not worth exploring or repeating.

The XB-17

Billy Mitchell was tried by courts-martial in 1925 symbolic that his views of air power were rejected. Strategic bombing was not part of the Army’s mission. Moreover, it was contrary to then current U.S. defense policy which was essentially defensive in nature. One senior Army general asserted that airplanes needed no more range than to fly three days march ahead of the ground troops. However in 1931 senior Army and Navy leadership agreed that Army aviation could play a role in the defense of U.S. coasts and offshore territories. Army coastal artillery resided in forts now flying fortresses were permitted.

Boeing 299 rollout 16 July 1935

In 1926 the Air Corps Act of that year created the Air Corps in succession to the Army’s Air Service. In the lengthy piece of legislation one paragraph of section 10 reads as follows:

The Secretary of War or the Secretary of the Navy may at his discretion purchase abroad or in the United States with or without competition, by contract, or otherwise, such designs, aircraft, aircraft parts, or aeronautical accessories as may be necessary in his judgment for experimental purposes in the development of aircraft or aircraft parts or aeronautical accessories of the best kind for the Army or the Navy, as the case may be, and if as a result of such procurement, new and suitable designs considered to be the best kind for the Army or the Navy are developed, he may enter into contracts… for the procurement in quantity of such aircraft, aircraft parts, or aeronautical accessories without regard to the provisions of paragraphs (a) to (e) hereof.

Benjamin Foulois became chief of the  Air Corps in December 1931 promoted to the rank of Major General. He later testified that he routinely used section 10 in the development of new aircraft for the Air Corps. Moreover, he personally involved himself in the selection and negotiation of key projects rather than leaving this to lower level subordinates. Bomber development advanced rapidly after the first monoplane bomber Y1B-7 succeeded earlier lumbering biplanes. The all metal B-9 was procured in only small quantities but the Martin B-10, recognized as a real advance in bomber design, was procured in quantity. Future chief of the Army Air Forces Hap Arnold led a formation of ten B-10s on a trek of thousands of miles to Alaska and back winning the MacKay Trophy in 1934. In early 1934 a purely experimental bomber (Project A, Boeing 294, later the XB-15) of immense size and potential range was authorized. In due course it also won a MacKay Trophy. Foulois used section 10 for one of a kind experiments as well as for “experimental purposes in the development of aircraft” prior to “contracts for the procurement in quantity.”

Boeing 299 Mount-Ranier, Washington

In May 1934 just about the time the Army’s air mail duty was wrapping up the Army initiated a design competition for a multi-engine bomber. A potential production run of up to 220 bombers was contemplated. Boeing began its design in mid-June. Previous experience from its all metal commercial airliner Boeing model 247 informed potential construction techniques. The actual design was essentially a scaled down version of its model 294. The term “multi-engine” permitted Boeing to work on a four-engine approach as opposed to the more likely twin-engine design as proposed by Martin and Douglas. Martin worked on an upgraded B-10 while Douglas based its bomber design on its commercial DC-2 passenger plane. Construction began on the Boeing model 299 in mid-August 1934.

The new four-engine bomber rolled out of the Boeing factory hanger in July 1935. It was the most sophisticated and technologically advanced aircraft of its day. The first flight took place on July 28, 1935, with civil registration NX-13372. After test flights in the Seattle area it was flown to Wright Field, Ohio on 20 August. The 2,100 miles was covered non-stop at an average speed to 233 m.p.h. Note the maximum speed of the Army’s fastest fighter (P-26A) was 234 m.p.h. The aircraft had a civil registration since it was owned by Boeing. The section 10 agreement provided for a bailment arrangement rather than an outright purchase. Boeing loaned the aircraft to the government for flight tests. The government loaned Boeing certain instruments and equipment to be fitted to the aircraft. After satisfactory tests and acceptance the purchase could be consummated.

Boeing 299

Meanwhile Maj. Gen. Foulois was being pilloried by influential Congressmen not only for the air mail debacle but for his direct involvement in aircraft procurement. Despite the rather clear language of section 10, the Army’s Judge Advocate took the position that section 10 did not authorize production contracts. Presumably formal advertising and lowest bid would be required. Foulois was accused of nefarious dealings with favored aircraft manufacturers. Secretary of War George Dern stood by him, but Foulois decided to retire when his term as Chief of the Air Corps expired in December 1935 “for the good of the service.” B-299 flight tests were so impressive that plans were afoot to order sixty-five of the big bombers. This would have been enough for two groups one on each seacoast. That did not happen.

On October 30, 1935, NX-13372 took off on a flight test piloted by two Air Corps pilots with three civilian contractor personnel from Boeing and Pratt & Whitney also on board. For first pilot Maj. P.P. Hill, Chief of Flying Branch, Material Division, Wright Field this was his first flight in the aircraft. Hill failed to release the flight control gust locks (which locked the moveable surfaces in place). The aircraft took off but immediately after take-off pitched up, stalled, crashed and burned. Hill died in the crash. Four others were injured including Boeing test pilot L.R. Tower who later died of his injuries. This event cast a pall over the program although the subsequent investigation found no fault in the aircraft contributed to the crash.

Boeing 299-NX13372-burning after crash Wright Field 30 Oct 1935

The aircraft would have been designated XB-17 upon formal delivery to the Air Corps. It appears that the Air Corps paid the contract price and took title to the wreckage of the aircraft. Publications often use the terminology XB-17 in discussing the Boeing 299. The crash, possibly in combination with the reverberations of accusations against Foulois, scrapped plans for a buy of sixty-five aircraft. In early 1936 after Foulois’ retirement Boeing received a contract for thirteen service test aircraft. These were purchased with non-procurement (F-1) funds. The Army bought over two hundred Douglas B-18 and B-18A aircraft.

The Y1B-17s were indeed service test aircraft but they were used to demonstrate that such a sophisticated aircraft was not too complicated, could be kept in commission and would not have a high accident rate. More particularly they were used to demonstrate their capability and that the Air Corps needed more of them.

The Y1B-17 was essentially a Boeing 299 with GR-1830 engines in place of the R-1690E engines of the original. The first Y1B-17 was delivered to Wright Field in January 1937. Twelve others were delivered to the 2nd Bombardment Group between March 1 and August 5, 1937. The aircraft was simply referred to as the B-17 by those that flew it. In a year and a half B-17s flew 10,000 hours operating from over forty airfields in the U.S. and overseas. A B-17 crew won the MacKay Trophy for a flight to Peru. On May 12, 1938, three B-17s flew through difficult weather to intercept the Italian liner S.S. Rex over 700 miles from New York. Navy leaders, outraged by this remarkable and well publicized achievement, demanded the Army limit its coastal defense mission to less than one hundred miles. After many flying hours all twelve B-17s of the 2nd BG were still in operation. According to an Air Corps newsletter: “these airplanes are in as excellent condition today as they were when they rolled out of the Boeing Factory.” Compare that to today’s Air Force 62% mission capable rate!

As war clouds darkened in 1938 the urgent need for more and better aircraft became apparent. Congress began enacting new laws authorizing various flexible approaches to defense capability development and production. Negotiated procurement, limited competition and sole source awards were permitted as well as other flexible procedures. Section 10’s provisions were expanded to ordnance and chemical warfare activities. Most of the laws applied only for the duration of the national emergency or were otherwise time limited. After the war business as usual contracting returned. In 1947 the Armed Services Procurement Act provided a ray of hope. It embodied some of the wartime era flexibility.

But…then came the Armed Services Procurement Regulation (ASPR). Its initial three hundred pages included restrictions on contracting flexibility requiring detailed justification for any approach other than business as usual. The regulatory page count grew over time. By 1972 the Commission on Government Procurement found a “mass and maze of regulation”. In 1986 the Packard Commission explored reasons why defense acquisition “costs too much and takes too long”. In 2019 the section 809 panel found the acquisition system was getting worse, not better. The attitudes evident in the story of the XB-17 and the treatment of General Foulois are evident today. When will we learn?   

There are many strings that lead from this article to numerous other aviation and acquisition stories, but I have tried to compress this to a relatively compact rendition of a few key events. I hope it was interesting and enlightening.

If you’re interested in articles by Richard Dunn about innovative government contracting, visit Strategicinstitute.org.