Pentagon Buying Boeing F-18s as Hedge Against F-35 Delays

The U.S. Defense Department will continue to buy Boeing Co. (BA) F-18 fighters as a hedge against delays in producing the Lockheed Martin Corp. (LMT) F-35 jet, the Pentagon’s top weapons buyer wrote a lawmaker this month.

“The department’s commitment to the F-35 is solid and we are committed to production rates that minimize cost,” the Defense Department’s undersecretary for acquisition, Ashton Carter, wrote Texas Republican Senator John Cornyn on Sept. 1.

The Pentagon last year requested $1.9 billion for 22 additional non-stealthy F-18E/Fs and $2.6 billion more for 28 in fiscal 2012 from Chicago-based Boeing. Some of this money came from a pool of $12 billion in F-35 funds that the Pentagon last year cut or transferred, citing the need for additional testing of its top weapons program.

Buying additional F-18E/Fs “was an acknowledgment” that a delay in buying the Navy F-35 version “would slow down the rate at which” it would reach the fleet, Carter said.

The Navy estimates it will start in 2015 seeing a shortfall in the required number of fighters for its 11 aircraft carriers, Carter wrote.

Still, “the F-35 is a very high priority and the production rate will not be reduced solely to pay other bills in the budget,” Carter wrote.

Panetta View

Defense Secretary Leon Panetta wrote Republican Senator Saxby Chambliss of Georgia today that buying more F-18E/Fs “was an acknowledgment of the need to maintain capacity and capability.”

Buying additional “highly capable F/A-18E/F aircraft will help mitigate that shortfall while we continue to ramp up F-35 procurement,” Panetta wrote. “The F-35 is intended to complement the F/A-18E/F, not replace it. The Navy needs the capabilities that both aircraft provide.”

Panetta said the Pentagon’s “support for the F-35 is strong” but the military overall tactical aircraft portfolio “is not exempt” from the department’s ongoing overall “exhaustive review” of roles and missions.

“We are committed to making responsible” F-35 investment decisions that reflect program status, force structure requirements and Department priorities,’’ he wrote.

Questions from Cornyn

Cornyn sits on the Senate Armed Services Committee that today reviewed the nomination of Carter to be the next deputy Defense secretary, to replace William Lynn.

Carter’s Sept. 1 letter to Cornyn and another, on Sept. 6, were sent to answer the senator’s concerns that the Pentagon wasn’t sufficiently committed to the $382 billion F-35 program, which Bethesda, Maryland-based Lockheed Martin builds in Texas.

Carter in the Sept. 6 letter sought to clarify the Pentagon’s position on its preliminary estimate that the F-35 is projected to cost $1 trillion in operations and support cost through 2065, based on purchase of 2,443 jets.

“This estimate represents a projection based on an extensive set of assumptions and historical data drawn from previous programs adjusted to reflect the F-35’s configuration” -- not actual performance data for the joint strike fighter, Carter said. The program office is now conducting a “business case analysis” to sharpen the estimate, which won’t be completed until after the fiscal 2013 budget is submitted in February, Carter said.

Senate Panel Action

The Senate defense appropriations subcommittee in its version of the fiscal 2012 defense bill recommended today cutting $695 million from a $9.7 billion F-35 request and keeping production levels to 35 aircraft approved for this year, instead of increasing to more than 40 in fiscal 2013.

“We continue to strongly support this program and believe the F-35 is showing progress since it was restructured last year,” the panel chairman, Hawaii Democratic Senator Daniel Inouye said in a statement.

Still, there remains “excessive” overlap, or “concurrency” between development and early aircraft and only 10 percent of the testing program is complete.

The full Senate Appropriations Committee is scheduled to take up the $513 billion defense spending bill on Thursday.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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