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Pentagon Confident In F-35 Buy Schedule

Mar. 31, 2012 - 11:31AM   |  
Two F-35A Joint Strike Fighters and an F-16 Fighting Falcon taxi on the runway at Eglin Air Force Base, Fla., in August 2011.
Two F-35A Joint Strike Fighters and an F-16 Fighting Falcon taxi on the runway at Eglin Air Force Base, Fla., in August 2011. (Chrissy Cuttita / U.S. Air Force)
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The U.S. Defense Department believes the military services will be able to purchase large quantities of the F-35 Joint Strike Fighter late in the decade, despite competing modernization priorities and a relatively flat Pentagon budget.

A report sent to Congress on March 29 details the Pentagon’s plan for near peak production rates for the Lockheed Martin-built stealth jet beginning in 2018. In that year, program officials said they will be able to purchase 110 jets. By 2021, the production rate will hit 130 jets, which includes versions for the U.S. Air Force, Navy and Marine Corps.

But there are serious concerns within the Air Force and Navy about whether they will be able to afford the number of aircraft projected to be bought later this decade.

“We worked very closely with all the services, and particularly the programming and budgeting staffs of the services, to ensure that our program fits within their overall total obligation authority for the service in those years,” Air Force Maj. Gen. John Thompson, the F-35 deputy program executive officer, said in a March 30 briefing with a group of reporters in Arlington, Va.

Late in the decade, around 2018, the Air Force and Navy are expected to have a number of expensive programs enter production.

For example, the Air Force’s KC-46A tanker plane, now in development, is expected to enter full-rate production in that time frame, in addition to a new rescue helicopter, and a new bomber program is expected to be well underway. The Navy’s Ohio-class submarine replacement, the SSBX(X), is projected to consume a large portion of the service’s shipbuilding budget.

In February 2011, then-Defense Secretary Robert Gates told Congress he wasn’t sure the services would be able to afford all of the modernization programs envisioned in the 2020s.

“We continue to be concerned about affordability in the long term of the Joint Strike Fighter,” Deputy Defense Secretary Ashton Carter said at a March 8 conference sponsored by McAleese & Associates and Credit Suisse.

DoD now plans to fully ramp up production of Marine Corps and Navy F-35s at a pace of 50 jets per year in 2018, according to DoD’s recently updated selected acquisition report for the program. Last year’s report projected 50-aircraft-per-year buys beginning in 2017.

Program officials are expecting the Navy and Marine Corps jets to be evenly split at 25.

Air Force production is expected to hit 60 jets in 2018 and peak at 80 jets in 2021. Last year’s report projected 80-aircraft-per-year buys beginning in 2017.

“As we got closer out to the end of the [five-year future years defense plan], based on our analysis of Lockheed Martin’s capabilities and based on the production desires of the services and partners, we elected to go into a gradual production ramp,” Thompson said.

The deputy program manager expressed optimism that the Air Force could reach that 80-aircraft-per year goal. Those numbers might have to be tweaked to accommodate international purchases, Thompson noted.

“We’ve been given a production profile to plan to [and] we’re doing that,” Steve O’Bryan, Lockheed’s vice president for F-35 program integration and business development, said March 30.

The estimated cost per jet varies depending on a multitude of factors, including whether already spent development costs are included.

Using 2012 dollar values, the program office projects the Air Force version of the jet, the aircraft being purchased by most international customers, to cost $78.7 million.

The carrier version’s recurring flyaway cost is projected at $87 million, and the Marine Corps’ short-takeoff, vertical-landing version at $106 million, also using 2012 dollar values.

The average procurement unit cost of all versions, including contractor services, publications, training and support equipment and other items, comes in at about $109 million per jet.

Despite the cost increases, Lockheed said the F-35’s cost will be on par with the F-16, one of the combat jets it is designed to replace. The company believes the Air Force version of the F-35 will cost closer to $70 million per aircraft.

Company officials said this is on par with the F-16, since the F-35 comes with additional equipment not included in F-16 cost estimates, such as a targeting pod.

Using then-year dollar estimates, DoD now says the entire F-35 program will cost $396 billion, $17 billion more than it estimated last year, according to the selected acquisition report. The overall sustainment cost for the program is estimated at about $1.1 trillion, according to the document.

DoD officials project the F-35 program will cost $1.51 trillion over 55 years. That cost includes production, development, operations, sustainment and other items, according to program officials. The program cost estimate last year was $1.38 trillion. That’s a $124.2 billion, or 9 percent, increase.

The new estimate also adds two and a half years to the program.

Slowing procurement of the F-35 in the near term, as laid out in DoD’s 2013 budget request, will add nearly $6.2 billion in procurement and development costs. DoD removed 179 F-35s from planned buys between 2013 and 2017.

“As we have restructured and rebaselined our development program, as we’ve flattened our production ramp and as we’ve addressed the life-cycle costs going forward ... we are confident that the program that we have now established is executable,” Thompson said.

The program has experienced issues with the jet’s helmet-mounted display and the carrier-version tail hook.

“We have the appropriate resources, we have the time to do the work the correct way and we absolutely, positively have the support of all the services, our eight international partners and our growing posse ... of [foreign military sales] customers,” Thompson said.

Frank Kendall, the acting Pentagon acquisition executive, approved the new F-35 baseline March 26, Thompson said. The program has not been rebaselined since 2002.

“That acquisition-program baseline essentially reflects our revised program, sets our cost, schedule and technical performance going forward. It updates us from base year ’02 to base year ’12 dollars, [and] breaks the program down into two major subprograms — aircraft and engine,” Thompson said.

Kendall gave the OK on March 28 to continue development and low-rate production. DoD sent the revised F-35 numbers to Congress in its selected acquisition reports March 29.

“A large portion of the [authorization memo Kendall signed] was devoted to affordability targets for the program, both in the unit recurring flyaway cost and then cost per flying hour,” Thompson said.

“We have got to drive cost out of the program. Affordability is a major focus on the program going forward, but we know we can’t just concentrate on affordability,” Thompson said. “We have issues, such as software development, that we have to dependably deliver.”

Lockheed is three months behind on software development, O’Bryan said. The company has built a $150 million “mission systems lab” to test new software and has hired 200 new software engineers to work on these issues.

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