Lockheed F-35’s Operating Cost Estimate to Decline
The Pentagon will decrease its $1.1 trillion estimate for the cost of supporting Lockheed Martin Corp. (LMT)’s F-35 fighter jet over a 55-year lifespan, the top U.S. weapons buyer said.
“It will drop to a number that’s not trivial but is not as much” a reduction “as I would like,” Frank Kendall, the Defense Department’s undersecretary for acquisition, said today at a Bloomberg Government breakfast in Washington.
While debate over the aircraft, the costliest U.S. weapons system, has focused mostly on the price to develop and build the fighter, Pentagon agencies also have disputed its long-term operating costs, from spare parts to repairs.
Kendall declined to elaborate on the reduced 55-year estimate by the department’s independent cost-assessment office. The figure will be released later this month in its next unclassified Selected Acquisition Report. Until then, the official projection is the $1.1 trillion formulated by that office three years ago.
By contrast, the Pentagon’s F-35 program office estimates that the fleet will cost $857 billion to operate and support over its lifetime.
On the separate cost of developing and producing a planned fleet of 2,443 F-35s, the U.S. Government Accountability Office said in February that its projection is $390.4 billion, as adjusted for inflation over the years the plane is produced. The Pentagon’s latest estimate by the same measure is $391.2 billion, about a 1.1 percent reduction from an earlier calculation.
That’s still a 68 percent increase from a 2001 estimate the included 409 more planes.
“It’s frustrating to me that eight years into production we still have a fair amount of development to go, and I don’t want people to lose focus on that,” Kendall said today. He previously has described the simultaneous development and production of the F-35 as “acquisition malpractice.”
Kendall said that his focus is on ensuring that Bethesda, Maryland-based Lockheed, the biggest U.S. government contractor, continues to lower production costs.
Before the award of an eighth production contract, “I want to see specific progress,” working with the F-35 program office to identify some milestones “that will give us an indicator of where we are.”
Kendall said he also wants to see “active progress” on the next version of software the Marine Corps needs to declare operational its first F-35 models by July 2015 as well as a final version of war-fighting software. “We still have a lot of work to do,” he said.
Progress on software testing and structural durability for the Marines’ F-35B model “will factor into the details” on the eighth contract, which may include actions that Lockheed must complete to received increased orders, he said.
Kendall said he didn’t have any indications that the eight countries that were original partners for the F-35 will be “substantially reducing” their planned quantities, though “there have been some adjustments for budget reasons.”
“Everybody is still there and everybody still plans to buy the airplanes,” he said.
The F-35’s rocky path reflects in part a culture of optimism that’s common in weapons-buying, Kendall said.
The weapons acquisition world is under “huge pressures to be optimistic,” starting with contractors “who are going to advertise capabilities and costs that are optimistic. It starts with requirements writers -- the user -- who wants the best possible product,” Kendall said.
“Then there are budgeteers who are trying to cram as much into the budgets as possible,” he said. There also are the leaders of military services “who want to have as much in the budget as possible and don’t want to kill programs,” he said. Then there’s Congress, which “likes to have things funded and keep them going.”
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