Inside Defense
Dec. 9, 2009 -- The Office of the Secretary of Defense has issued a draft directive that would require the services to fund the F-35 fighter program in accordance with the recommendations of recent independent reviews, a move that would extend development by at least a year, reduce production by approximately 100 aircraft and require the addition of billions of dollars to the effort through 2015, according to defense officials.
This previously unreported development, spelled out in a draft fiscal year 2011 resource management decision and confirmed by four Defense Department officials, amounts to a repudiation of the cost estimate advanced by the Joint Strike Fighter program office and prime contractor Lockheed Martin and sets the Pentagon's costliest acquisition program on course to immediately breach so-called “critical” Nunn-McCurdy cost-growth thresholds, these officials said.
Defense Secretary Robert Gates -- who recently huddled with a small group of senior Pentagon officials to consider the way forward with JSF -- is scheduled to consider appeals by the military services to the proposed FY-11 budget next week, according to DOD officials.
The goal is to complete the FY-11 spending proposal and outyear numbers by Dec. 22, these officials say.
The proposed changes to the F-35 program follow recommendations this fall by the JSF Joint Estimate Team II, reaffirming findings prepared in 2008 that said as many as two additional years for development were required and as much as $16.6 billion more was needed between FY-10 and FY-15 (DefenseAlert, Oct. 22).
In addition, the draft budget decision reflects the recommendations of a previously unreported independent review team headed by retired Navy Rear Adm. Craig Steidle -- currently a Naval Academy professor and the JSF program executive officer from 1995 to 1997 -- that was asked by the office of the Pentagon's acquisition executive to assess Lockheed's JSF manufacturing capability.
The review by Steidle's “Independent Manufacturing Review Team,” according to DOD officials, concluded that production of approximately 100 aircraft between FY-11 and FY-15 should be delayed because Lockheed -- without taking a number of remedial steps -- was not poised to meet planned production targets during a phase of the program when production was slated to accelerate. The draft budget directive, Pentagon officials said, would require cuts to JSF production by the Air Force, Navy and Marine Corps.
At press time Lockheed was unable to respond to questions about the assessment.
Extending the development schedule will permit additional time to understand JSF flight sciences and to conduct more extensive mission system flight testing, according to Pentagon sources (DefenseAlert, Nov. 24).
Pentagon officials say the draft budget decision, if approved, would suggest that Gates has endorsed the JSF JET II estimate, which his spokesman last month characterized as “pessimistic,” as well as the findings of the independent manufacturing review team.
Gates, after an August meeting with Lockheed executives at the JSF manufacturing plant in Texas, said, “My impression is that most of the high-risk elements associated with this developmental program are largely behind us, and I felt a good deal of confidence on the part of the leadership here that the manufacturing process, that the supply chain, that the issues associated with all of these have been addressed or are being addressed.”
The Nunn-McCurdy law requires that Congress be notified if a program faces cost growth greater than 15 percent over the current baseline estimate. It also dictates that the project be terminated if the price climbs higher than 25 percent above the baseline -- a “critical” breach -- unless the defense secretary certifies the program is essential to national security, that no lesser-cost alternative is available, and that cost controls are in place.
A new Pentagon policy adopted Dec. 4 to implement the 2009 Weapons Systems Acquisition Reform Act calls for programs that experience a critical cost breach to be restructured “in a manner that addresses the root cause or causes of the critical cost growth,” to have their "most recent milestone approval rescinded,” as well as other steps to rein in cost growth. -- Jason Sherman
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