Pentagon May See Higher F-35 Costs, Delays Up to Three Years
Lockheed Martin Corp.’s F-35 Joint Strike Fighter, the Pentagon’s costliest program, may see more price increases and new schedule delays of as much as three years, two government officials familiar with the matter said.
Defense Secretary Robert Gates is scheduled to be briefed tomorrow on new cost and schedule assessments for the F-35 and other aircraft, said the officials, who requested anonymity because details aren’t public. Software, engineering and flight difficulties are greater than expected, the officials said.
The projections are based on a preliminary analysis of test and production data, the officials said. The F-35 “Technical Baseline Review” is being prepared for an in-depth examination of the $382 billion JSF program, set for Nov. 22 by the Pentagon’s Defense Acquisition Board, the officials said.
“Another delay to the JSF would be negative to Lockheed’s revenue profile on the program,” Robert Stallard, an analyst at RBC Capital Markets in New York, said in a note. Suppliers at risk include United Technologies Corp.’s Pratt & Whitney, said Stallard, who rates Lockheed as “sector perform.”
New delays and higher prices would add to the struggles in development and combat testing of the F-35, which is more than four years behind schedule. Designed for missions including bombing and aerial combat, the JSF will be used by the Air Force, Navy and Marine Corps.
Lockheed has provided “full support” to the Pentagon for the F-35 review, said John Kent, a spokesman for the Bethesda, Maryland-based company. “It would be premature for Lockheed Martin to discuss the results of the review until the findings have been released,” he said in an e-mail.
A Pentagon spokeswoman, Cheryl Irwin, also declined to comment.
Tomorrow’s briefing with Gates will draw in part on a review prepared by the F-35 program manager, Vice Admiral David Venlet, who won’t be present, the officials said. When finished, his review will disclose broad ranges of potential expense growth, they said.
Gates “is engaging in a broader tactical-aircraft discussion of which the Joint Strike Fighter is obviously an important piece,” a spokesman, Geoff Morrell, said in an e- mailed statement.
The $50 billion development phase may cost as much as $5 billion more, and Pentagon analysts now estimate the JSF may be as much as 1 1/2 times more expensive to maintain than the warplanes it will replace, according to preliminary estimates in Venlet’s review, the officials said.
Slippage in the JSF’s timetable may be as much as one year for the Air Force and Navy versions and two to three years for development of the Marine Corps model capable of short takeoffs and landings, the officials said.
The potential increases would be on top of changes unveiled this year by the Pentagon: a 13-month extension to the current development phase to November 2015, shifting of $2.8 billion in production funds for continued research and delaying the purchase of 122 jets to beyond 2015.
“How many more reviews will Gates have to hear before he acknowledges the F-35 is an unaffordable failure?” said Winslow Wheeler, a program critic who is director of the Washington- based Straus Military Reform Project. “The F-35 is rapidly becoming a millstone around his neck.”
The JSF review is part of the preparation for the Defense Department’s fiscal 2012 budget, which is scheduled to be released in February. Long-range Pentagon plans call for requesting 45 aircraft in fiscal 2012, 71 in 2013, 90 in 2014 and 113 in 2015.
Congress hasn’t completed work on the fiscal 2011 defense budget in which the Pentagon requested 43 aircraft.
The House of Representatives’ defense bill approved funding for all 43 planes while limiting spending to 30 aircraft pending Pentagon certification that the JSF meets certain test parameters.
In its measure, the Senate Appropriations Committee cut $1.5 billion and 10 aircraft from the Pentagon’s request, saying, “Production has not moved as quickly as previously planned and has not kept pace with scheduled increases.”
The full Senate hasn’t acted on the request.
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