WASHINGTON — A number of the reforms in Pentagon acquisition and business practices over the past few years have started to pay dividends, a senior Pentagon official said.
Pointing to the latest batch of Selected Acquisition Reports (SAR) released Thursday, the official said that the closer eye that chief weapons buyer Frank Kendall has insisted that the building keep on its acquisitions costs has led to a reduction in the number of programs that have shot past their initial cost estimates.
"We have fewer programs than last year overrunning their unit costs," said a senior Pentagon official who asked to remain anonymous. "Sixty-nine percent of programs are underrunning their baseline for unit costs" as well.
The annual SARs summarize the latest estimates of cost, schedule and performance status of the Pentagon's biggest acquisition programs.
The F-35 joint strike fighter alone accounts for about 20 percent of the overall portfolio, which in this reporting period covered more than $1.6 billion in spending on 77 programs.
But perhaps the best news for the Pentagon overall is the $7.7 billion cost reduction for the F-35 joint strike fighter.
The F-35 is set to be the backbone of American air power for the foreseeable future, but has a well-earned reputation as a budget hog. Program officials and industry executives have said they are focused on bringing costs down, and Pentagon auditors seem to agree, citing work by prime and subcontractors to drive down those price tags.
The current average F-35A price is $108 million — with the engine — which is $4 million lower than previous estimates.
A spokesperson for the F-35's Joint Program Office said the team has taken "a disciplined approach to analyzing and reducing sustainment costs. Ongoing activities include conducting a sustainment business case analysis and operating a cost war room to find program savings and attack operational, sustainment and total ownership costs."
Lorraine Martin, F-35 program manager at Lockheed Martin, said in a statement that the company is "extremely pleased with the nearly $60 billion decrease in operations and support costs of the F-35 program during the last year alone." Martin added that there are numerous other initiatives in place, "including the Blueprint for Affordability, that will drive program costs even lower ... by the end of the decade."
The Pentagon also reported that the backbone of the Army's communications network breached Nunn-McCurdy thresholds.
The Warfighter Information Network-Tactical (WIN-T) Increment 2 and 3 will be partially combined and reduced, a move which caused the breach. WIN-T Increment 2, the networking-on-the-move portion of the program, experienced a surge in unit cost when procurement of nodes was cut from 5,267 to 3,583 and the procurement schedule was extended by two years. It was classified as a "significant" breach.
The program is seeking a full-rate production decision in May, according to Paul Mehney, a spokesman for Program Executive Office Command, Control Communication-Tactical. Meaney attributed the breach to, "anticipated fact of life program changes and does not require WIN-T Inc 2 fielding and development efforts to stop."
In June, the Army announced it would defer Increment 3, the network's aerial tier, due to fiscal constraints. The move equates with a cost drop from $3.7 billion to $1.9 billion reported in the summaries.
Soldiers testing the Manpack, meant to serve tactical units with simultaneous voice and data communications in the field, faulted its range and reliability in certain cases, its weight and the heat it generated.