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DoD Anticipates Better Price on Next F-35 Batch

Mar. 8, 2012 - 07:34PM   |  
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The U.S. Defense Department believes it could negotiate a lower deal for its next order of F-35 Joint Strike Fighter aircraft despite a decision to remove 179 jets from the Pentagon’s five-year spending plan.

The Pentagon and F-35 prime contractor Lockheed Martin are working to hammer out an agreement for the fifth batch of 30 low-rate, initial-production (LRIP) aircraft.

“We’re right in the middle of it, and I believe both parties know there is an expected benefit year-by-year even though you’re flat,” said Vice Adm. David Venlet, F-35 program manager, after a presentation at a March 8 conference sponsored by McAleese & Associates and Credit Suisse.

“I’m confident we’ll come to a fair and reasonable deal,” he said.

The Pentagon’s 2013 budget proposal, which was sent to Congress last month, calls for slowing F-35 production — by removing 179 jets from planned production over the next five years — so the program can fix issues that arise in the simultaneous development of the aircraft.

The jet has experienced numerous problems in testing. Among them are issues with the carrier-version tailhook not being able to grip the runway’s arresting cable to stop the aircraft.

“The actual shape of the point [of the tailhook] itself will be adjusted,” Venlet said. “We’ll test some interim steps in that redesign here at the end of the summer.”

Despite issues, the Pentagon was able to ink a fixed-price deal with Lockheed for the fourth batch of LRIP aircraft.

The U.S. Air Force, while still dedicated to the F-35, has learned a valuable lesson from the development process: You can’t develop a plane entirely on a computer.

“There was a view that we had advanced to a stage of aircraft design where we could design an airplane that would be near perfect the first time it flew,” Gen. Norton Schwartz, the Air Force chief of staff, told investors at the same conference. “I think we actually believed that. And I think we’ve demonstrated in a compelling way that that’s foolishness.”

However, Schwartz was unequivocal in the Air Force’s support of the program.

“F-35 is the future of tactical aviation for the Air Force,” he said.

Pentagon officials are reviewing how much the F-35 program will cost. The Pentagon’s last official estimate pegged development and production near $380 billion for more than 2,800 U.S. and international aircraft. The Pentagon plans to buy 2,443 F-35s for the Air Force, Navy and Marine Corps.

In addition, the sustainment price tag for the jet has been pegged at $1 trillion, a number the Pentagon is feverishly working to reduce. For example, the Air Force is looking to cut the number of locations at which it plans to base the F-35 to shrink these sustainment costs.

“We continue to be concerned about affordability in the long term of the Joint Strike Fighter,” said Deputy Defense Secretary Ashton Carter.

A revised program cost estimate will factor into international purchases of the jet, such as Italy’s recent decision to buy 41 fewer aircraft, Venlet said. That said, estimates for Japan, which announced it would purchase 42 F-35s last December, have not yet been included.

“There’ll be an ebb and flow,” Venlet said of international buys.

Zachary Fryer-Biggs contributed to this report.

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