Pentagon buying chief: F-35 'unaffordable' without changes

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Pentagon buying chief: F-35 'unaffordable' without changes
By John T. Bennett - 05/19/11 10:40 AM ET
Pentagon acquisition chief Ashton Carter told senators Thursday that the latest cost estimate for the F-35 fighter program — which has nearly doubled from initial targets — would make the fleet of war planes unaffordable.

The Pentagon last year examined whether there was a "better alternative" to completing the triple-variant F-35 project, but found none, Carter said. "But it has to be affordable. Right now, it is not," he told the Senate Armed Services Committee.

The Pentagon's top weapons buyer said the program currently has "an unacceptably high acquisition bill."


Pentagon officials are working with the military's program office and prime contractor Lockheed Martin to bring down the program's estimated $385 billion price tag. The Pentagon negotiated a tougher deal with Lockheed for the latest batch of jets that featured a smaller price tag than under previous contracts.
The cost of each F-35 jet, short of program changes, would be $103 million, according to Christine Fox, director of the Pentagon's Cost Assessment and Program Evaluation office.

Sen. John McCain (R-Ariz.), the committee's ranking member, noted earlier in a hearing on the program that, initially, the Pentagon intended each plane to cost $69 million.

Senior Pentagon officials earlier this year placed the Marine Corp's version of the F-35 program on two years of probation to due ongoing design and development flaws. They also cut the number of F-35s the Navy and Air Force intend to purchase, and shook up the program's production schedule.

In written testimony submitted to the panel, Pentagon and Lockheed officials presented an upbeat assessment of revised program plans. McCain and Sen. Carl Levin (D-Mich.), the committee's chairman, opened the session with statements critical of the program's history of schedule delays, developmental setbacks and cost spikes.

 

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Costly fighter under fire from lawmakers
Jim Wolf
Reuters
2:24 p.m. CDT, May 19, 2011


WASHINGTON (Reuters) - Lockheed Martin Corp's increasingly costly F-35 Joint Strike Fighter is testing congressional support, with top Senators calling on the Pentagon to offer alternatives.

Ashton Carter, the Pentagon's top arms buyer, told the Senate Armed Services Committee on Thursday that buying more than 2,400 F-35s would cost twice as much in real terms as originally estimated, absent significant changes.

Three F-35 models are being built for the U.S. Air Force, Navy, Marine Corps and allied countries.

Committee chairman Carl Levin said new estimates of "life-cycle" F-35 costs, including development, operation and maintenance, now top $1 trillion. The committee has been a strong supporter of the program, but he asked Carter to present alternatives as a "backup" option within a week.


"People should not conclude that we will be willing to continue that kind of support without regard to increased costs resulting from a lack of focus on affordability," the Michigan Democrat said.

Senator John McCain of Arizona, the panel's top Republican, described the F-35 program as "incredibly troubled" and a "train wreck." He suggested the Pentagon think of alternatives to the F-35 program if its costs cannot be brought down.

Carter, the undersecretary of defense for acquisition, responded that there were no good alternatives to the F-35, a multirole aircraft due to replace various aircraft in the military fleets of both the United States and its partners.

BACKBONE OF POWER

The U.S. Air Force's top arms buyer, David Van Buren, said he was looking at possible programs to extend the life of Lockheed F-16s to compensate for F-35 delays.

Boeing's F/A-18E-F Super Hornet could also benefit from F-35 problems and delays, aerospace analysts have said.

Lockheed Martin expects the F-35, due to be the backbone of U.S. air combat power for decades to come, to account for more than 20 percent of its global sales once full production kicks in, at a date still to be determined.

President Barack Obama has asked Congress for $9.7 billion in fiscal 2012, which starts October 1, for continued system development, test and purchase of 32 early production F-35s.

Asked by Alaska Democrat Mark Begich whether he would like to drive the costs down 20 percent to 50 percent, Carter replied: "You're in the right ballpark."

Lockheed Martin, the Pentagon's No. 1 supplier by sales, had done an "abysmal job" of keeping the F-35 on budget, McCain said, and suggested the company should absorb at least some of the overruns rather than taxpayers.

Carter, in a prepared joint statement with two colleagues, said the Pentagon believed it had put the program on a "sound footing for the future" despite the challenges that remain to drive down prices.

Eight countries have put up a total of more than $4 billion to co-develop the F-35 -- Britain, Italy, Netherlands, Turkey, Canada, Australia, Denmark and Norway. Carter said he expected foreign F-35 sales to total 600 to 700 aircraft. Low-rate initial production of aircraft began four years ago.

The Government Accountability Office, the investigative arm of the U.S. Congress, said the program has not fully shown that the aircraft design is stable or that manufacturing processes are mature and that the system is reliable.

Total development funding is now estimated at $56.4 billion to wrap up in 2018, a 26 percent cost increase and a five-year schedule slip from the program's current "baseline," said Michael Sullivan, GAO's director of acquisition and sourcing management, in written testimony.

Carter acknowledged at the hearing that some prospective F-35 buyers were now planning to hedge and buy other aircraft instead.

Competitors for foreign sales include Saab's Gripen, Dassault's Rafale, Russia's MiG-35 and Sukhoi Su-35 as well as the Eurofighter Typhoon made by a consortium of British, German, Italian and Spanish companies.

Tom Burbage, Lockheed's F-35 program general manager, urged the government in his testimony to ramp up its F-35 purchases, to help capture economies of scale early on to bring down prices.

(Reporting by Jim Wolf; Editing by Gerald E. McCormick, Dave Zimmerman and Tim Dobbyn)

(This story has been corrected in paragraph 10 to show maker of F-16 is Lockheed, not General Dynamics)

 

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McCain urges U.S. to think about F-35 alternatives
WASHINGTON | Thu May 19, 2011 10:55am EDT
May 19 (Reuters) - U.S. Senator John McCain suggested Thursday that the Defense Department mull possible alternatives to Lockheed Martin Corp's (LMT.N) F-35 fighter program if its rising costs could not be contained.

McCain, the top Republican on the Senate Armed Services Committee, referred to the program as "incredibly troubled" and a "train wreck." He said Lockheed has done an "abysmal job" at containing cost overruns and urged that the company absorb at least some of them. (Reporting by Jim Wolf, Editing by Gerald E. McCormick)

 

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Now for some opposite news:

Lockheed, Pentagon upbeat on Marine Corps F-35 jet

By Andrea Shalal-Esa
WASHINGTON | Wed May 18, 2011 9:25pm EDT
(Reuters) - The Pentagon and Lockheed Martin Corp (LMT.N) remain upbeat about the future of the short takeoff version of the new F-35 Joint Strike Fighter despite Defense Secretary Robert Gates' threat to terminate the program should technical issues not be resolved in two years.

"We're success-oriented; we want it to work out," Pentagon acquisition chief Ashton Carter told Reuters in an interview last week. "It's important to us because it doubles the number of ships we can take JSF off from."

The Marine Corps variant, also known as the F-35B, is designed to take off from shorter runways and land vertically, like a helicopter. A variety of issues related to its unique capabilities had slowed development on the new jet.

But Lockheed executives and Carter say those issues are being addressed and the jet is outpacing its flight test schedule for the year.

Carter; Vice Admiral David Venlet, who heads the Pentagon's F-35 program office; Air Force acquisition chief David Van Buren; and Tom Burbage, Lockheed's general manager for F-35 program integration, are due to testify before the Senate Armed Services Committee on Thursday about the projected $382 billion F-35 program -- the Pentagon's costliest arms purchase.

One key issue will be negotiations under way between Lockheed and the Pentagon about a fifth batch of 35 F-35 early-production planes. The talks got off to a rocky start when Lockheed's proposal added $5 million to $7 million to the price for each plane compared with the previous batch.

Lockheed argues that its proposal is actually below the level estimated by the government last December, and notes that its costs will be higher since average monthly production under the contract would fall to three planes a month from the initially planned level of four planes a month.

Lawmakers also remain concerned about the fate of the short takeoff, vertical landing(STOVL) variant and the longer-term cost of operating and maintaining the new fighter jet, which is to replace about a dozen warplanes now in use by the U.S. armed services and foreign militaries.

Carter said Gates had wanted to give the program just one year to resolve remaining problems or face cancellation -- but he argued for an additional year to collect the needed data on the jet's weight and cost.

Carter said further issues could still emerge during flight testing, which would require engineering fixes, but Lockheed; engine maker Pratt & Whitney, a unit of United Technologies Corp (UTX.N); and the Pentagon's F-35 program office are "working real hard" to ensure the program's success.

After the end of the two-year probation period, Pentagon officials would review the key question: "Is the resulting airplane affordable and is it light enough that it can accomplish the vertical landings and the short takeoffs which are its raison d'etre?" Carter said.

Lockheed is busy producing the F-35B models that have already been ordered at its plant in Fort Worth, Texas, but the "probation" decision limits procurement of that model to just six planes in both fiscal 2012 and fiscal 2013 -- well below the production level of 17 planes in 2010.

The plane is gearing up for sea trials on the USS Wasp, an amphibious assault ship, off the coast of Virginia this October, Lockheed officials told Reuters last week.

Those tests -- and new measurement of the weight of the B-model without heavy test equipment on board -- will be significant milestones in coming months, Burbage said.

(Reporting by Andrea Shalal-Esa, editing by Gerald E. McCormick, Gary Hill)