Inside Defense
March 4, 2010 -- Expecting the Joint Strike Fighter Program to breach a critical cost threshold, defense officials are moving to examine the program's "affordability," as required by a new defense acquisition law, a Pentagon official told InsideDefense.com.
“We expect that there will be a Nunn-McCurdy” breach, said Matthew Schaffer, the deputy director for conventional forces in the cost assessment and program evaluation office, referring to the law prescribing what constitutes a significant cost overrun in major defense programs. “There are already efforts under way in the department to go through the full Nunn-McCurdy certification process,” he said March 3 following a speech at an industry conference in Arlington, VA, sponsored by the Precision Strike Association.
InsideDefense.com first reported that high-level Pentagon officials were warning as early as last October that the F-35 program would “likely breach” the most serious Nunn-McCurdy threshold (DefenseAlert, Oct. 29, 2009).
The 2009 Weapon Systems Acquisition Reform Act added new requirements to that certification process, which serves to argue before Congress that the continuation of a program is necessary for national security and that corrective action is being taken.
The legislation requires Defense Department leaders to compare the cost of completing the program without modifying its military requirements and the cost of continuing it with “reasonable” requirements modifications. The assessment also must include a cost estimate for a “reasonable alternative system or capability,” and it must discuss the “need to reduce funding for other programs” as a result of the cost breach, according to the legislation.
At CAPE, “We very much focus on alternatives,” Schaffer said. “I think another part that we will also look at is the affordability question -- that's also part of the acquisition reform act, and that's part of the certification process.”
“I think the Congress' question fundamentally is, 'What do we need to give up in order to afford the restructured program?'” he said.
Following a restructuring of the JSF program, for which defense leaders requested nearly $11 billion in the base defense budget request for fiscal year 2011, Pentagon officials “don't expect to see any additional resources” from Congress for the aircraft, Schaffer said.
Pentagon comptroller Robert Hale, who also spoke at the conference, echoed that sentiment. But, Hale said, “I wouldn't raise my right hand and swear” there will be no future cost growth because some uncertainty remains about the cost estimate underlying DOD's funding projections.
Still, should officials encounter unanticipated cost growth in the future, DOD would have to make do with existing money, which would mean buying fewer aircraft. “I don't see us getting a lot of added funding,” Hale said. He noted divergent projections between DOD and prime contractor Lockheed Martin about how many planes the military would get for the money budgeted, saying DOD's estimate is more conservative. -- Sebastian Sprenger