JUST IN: Watchdog Calls Projected F-35 Sustainment Costs ‘Unaffordable’
Department of Defense photo by Kyra Helwick
Projected sustainment costs for the F-35 joint strike fighter are unaffordable, and the problem will only get worse if no further action is taken, the Government Accountability Office warned in a new report released July 7.
Reducing such costs must be a top priority, the watchdog said in its study, “F-35 Sustainment: DoD Needs to Cut Billions in Estimated Costs to Achieve Affordability.”
The joint strike fighter is the largest acquisition project in the history of the Defense Department, with an estimated sustainment price tag of more than $1 trillion over the life of the program. The military plans to buy nearly 2,500 of the jets. The Air Force, Marine Corps and Navy are buying the A, B and C variants of the aircraft, respectively.
“The military services collectively face tens of billions of dollars in sustainment costs that they project will be unaffordable,” according to the report.
The cost to operate the platform can be as high as $38,000 per flying hour, according to estimates from the F-35 Joint Program Office.
Prime contractor Lockheed Martin has invested nearly $400 million dollars to reduce lifecycle sustainment costs, according to Greg Ulmer, the company’s executive vice president for aeronautics.
The GAO warned that affordability will only get worse without additional actions.
If the Air Force doesn’t reduce the estimated annual cost per tail by about 47 percent by 2036, it will exceed its sustainment budget by about $4.4 billion, the study said. The Marine Corps will need to reduce annual sustainment costs per F-35B by 26 percent and the Navy must cut F-35C annual sustainment costs by 24 percent to meet affordability constraints in the mid-2030s, it added.
The F-35 Joint Program Office created a Directorate of Affordability and an Affordability War Room, which reportedly found $68 billion in lifecycle cost savings. However, cost assessment and program evaluation officials told the GAO that they have not verified the savings calculation.
“According to several DoD officials, even if all of the $68 billion in cost avoidance were achieved, that would represent only a fraction of the cost reductions needed to reduce the program’s sustainment costs and achieve the services’ affordability constraints,” the GAO report said.
The Air Force’s situation is becoming increasingly serious, the study said. Service officials told the watchdog that the only options available to meet budget constraints may be to buy fewer platforms or reduce flying hours.
“According to Air Force officials, the steps taken by the Affordability War Room are prudent, but the results have not been sufficient to significantly improve the affordability of the program,” the report said.
Navy and Marine Corps officials told the GAO that they could resolve their cost overrun problems through existing cost saving initiatives.
In addition to affordability, the platforms’ readiness rates concerned the watchdog.
“F-35 mission capable rates — a measure of the readiness of an aircraft fleet — have recently improved, but still fall short of warfighter requirements,” according to the report.
“While the F-35’s mission capable and full mission capable rates have improved over the past two years, these rates remain well below the program’s objectives due to several significant and ongoing sustainment challenges,” the report said.
The Pentagon “partially concurred” with all of the executive-level recommendations from the GAO, which included changes such as requiring the program office to create a plan to achieve affordability and to document changes in program requirements necessary for reductions.
However, Pentagon officials noted that they would likely not be able to implement these changes before the decision to begin full-rate production.
The watchdog discouraged delaying affordability endeavors “given the magnitude of the gap between projected sustainment costs and the services’ affordability constraints.”
The report also urged lawmakers to take action. It recommended Congress require an annual Defense Department update on affordability efforts and make future procurement dependent on the efforts’ progress.