Marine Corps Chief Eyes New Cost-Cutting Plan for F-35B Aircraft (UPDATED)

3/25/2012
By Sandra I. Erwin
Gen. James F. Amos came under intense fire this month on Capitol Hill after he acknowledged that he did not know the precise cost overruns in the F-35 Joint Strike Fighter.
One of the program's staunchest critics, Sen. John McCain, R-Ariz., pressed Amos during a March 15 Senate Armed Services Committee hearing to explain recent data that shows a $150 billion cost growth in the JSF program since 2001.
McCain's line of questioning appeared to have caught Amos off guard. His spokesman Lt. Col. Joseph M. Plenzler, said the question was misdirected as the general's focus has been on just one piece of the JSF program -- the short-takeoff and vertical landing F-35B -- and he should not have been expected to know cost trends for all three variants of the aircraft that are being produced for the Air Force, Navy and Marine Corps. 
"Senator McCain's questions were about the cost growth of the entire F-35 program since 2001, not the F-35B specifically," Plenzler wrote in an email. "Since becoming Commandant, General Amos has indeed closely tracked current production costs, production rates, and developmental testing progress." 
But Amos does have concerns about a rising price tag for the F-35B and plans to take action to reduce costs, such as buying aircraft at a slower pace than originally planned and reevaluating program requirements, Plenzler said. (SEE CLARIFICATION)
Amos has been avocal champion of the F-35B, and has fought over the past year to get the program off the "probationary" status that former Defense Secretary Robert Gates mandated as theaircraft faced problematic issues such as excess weight, the ability to transition from vertical to horizontal flight and other technical setbacks.
 
Amos has said repeatedly that hekeeps tabs on the F-35B on a daily basis, and set up his own situation room at the Pentagon, where he can monitor program data that is updated daily. "I track it like the Dow Jones," Amos said at an industry conference last year. "I've got three large computer screens and the left one is consumed with JSF. I know when the guy on the assembly line down in Lockheed Martin takes his break."
Amos meets every six weeks in his office to examine cost and schedule issues with senior leadership from the F-35 program, Plenzler added. Those meetings include representatives from JSF manufacturer Lockheed Martin, Defense Department, Navy and Marine aviation.
Although Marine officials said the technical glitches in F-35B were fixed and Defense Secretary Leon Panetta took the F-35 off probation in January, the program is not out of the woods.
"The commandant recently initiated two efforts to reduce F-35B program costs," Plenzler said. One is to lower the F-35B production ramp rate. Amos also will be "reviewing decade-old requirements data to ensure relevance and cost acceptability," he said.
The JSF is far from being in danger of termination, as the Pentagon has bet the entire future of U.S. military combat aviation on the program. But getting JSF out of the congressional doghouse could take years, and all three branches of the military are likely to push the schedule to the right as cost overruns pile up.
In a February report to Congress, aviation analyst Jeremiah Gertler of the Congressional Research Service, said lawmakers might want to "review the causes" of why the F-35 is behind schedule and over budget. "Although the F-35 was conceived as a relatively affordable strike fighter, some observers are concerned that in a situation of constrained DOD resources, F-35s might not be affordable in the annual quantities planned by DOD, at least not without reducing funding for other DOD programs," Gertler wrote. "As the annual production rate of the F-35 increases, the program will require more than $10 billion per year in acquisition funding at the same time that DOD will face other budgetary challenges."
Previous Pentagon plans had contemplated increasing the procurement rate of F-35Bs and Cs for the Marine Corps and Navy to a combined sustained rate of 50 aircraft per year by fiscal year 2014, and completing the planned procurement of 680 F-35Bs and Cs by about 2025. But those projections went out the window two years ago when Pentagon acquisition chief Ashton Carter restructured the program and added 13 months to the development schedule.
If further delays keep pushing full-rate production further into the next decade, the fear is that the unit cost of the aircraft could skyrocket, creating the dreaded "death spiral" of soaring cost that has doomed other Pentagon big-ticket procurements.
"There is a tension between reducing costs by increasing production rates and keeping up with developmental changes," Gertler said. "Lockheed Martin has been pushing hard to increase the production rate, arguing its production line is ready and it has reduced problems on the line to speed things up," he said. "Speeding up production, of course, would boost economies of scale and help lower the politically sensitive price per plane."
The six F-35Bs and four F-35Cs requested for fiscal year 2013 in the Department of the Navy budget have a combined estimated procurement cost of $2.6 billion, or an average of $263.9 million each. CRS study noted that these aircraft have received $226.3 million in prior-year advance-procurement funding, leaving another $2.4 billion to be funded in 2013 to complete their projected procurement cost.
At the SASC hearing, McCain voiced exasperation about the budgetary smoke and mirrors that he has seen in the F-35 program for years. "All I can say is that I have been watching this aircraft since 2001, and I've watched the cost overruns now, and I don't believe that it's an accurate state. There's been roughly $150 billion additional costs, and we are now still in the early stages of what was planned to be 2,456 aircraft."
Navy Secretary Ray Mabus said he is confident that the service will buy the currently planned quantities of carrier and STOVL variants. Despite all the recent troubles, he said, "We have remained constant in the number of total aircraft that we will buy in the program -- 680 aircraft total for the Department of the Navy. That's 420 for the Marine Corps, including 360 B's and 80 C's for the Marines."
CLARIFICATION: Amos' spokesman said that lowering the production ramp rate could impact near-term procurement but that the overall goal of purchasing 340 F-35Bs and 80 F-35Cs has not changed.

Topics: Aviation, Joint Strike Fighter, Tactical Aircraft

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