Huge cost over-run for F-35 fighter project

The price tag for the F-35 Joint Strike Fighter (JSF) has increased by more than 50 percent, crossing a threshold that will force Pentagon officials to justify the need for the program to Congress, Pentagon officials have told a Senate panel.

The price for one F-35 fighter jet in 2001 was estimated to be $50 million. Now the price tag has risen to between $80 million and $95 million per plane, calculated in 2002 constant dollars. In today’s dollars, one aircraft would cost an average of $112 million, according to Michael Sullivan, the director of the acquisition team at the Government Accountability Office.

Some of the first jets are expected to cost about $205 million apiece, the Pentagon’s acquisition chief, Ashton Carter, told the Senate Armed Services Committee on March 11. Pentagon officials walked senators through the cost increase: The Pentagon in 2001 estimated the cost of one F-35 at $50.2 million for an order of 2,852 jets. In 2007, the Pentagon updated that estimate to $69.2 million for a reduced order of 2,443 jets.

The committee’s chairman and ranking member, Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.), respectively, did not hide their concern with the troubled program. Levin noted that the cost increase for the aircraft ranges between 60 and 90 percent.

“The taxpayers are a little tired of this. I can’t say that I can blame them,” McCain said. The F-35, being produced by Lockheed Martin, is the Pentagon’s largest and most expensive program ever, and one that Defense Secretary Robert Gates is banking on.

The F-35 is designed to be the next-generation fighter for the Air Force, Navy, and Marine Corps, as well as the militaries of eight U.S. allies.

Carter told the Senate committee that he expected the Air Force to formally notify Congress that the F-35 will breach the so-called Nunn-McCurdy law within days.

In her prepared statement, the Pentagon’s director of cost assessment and program evaluation, Christine Fox, said the declaration of the breach is expected by April 1.

The Nunn-McCurdy law requires the military services or the Pentagon leadership to tell Congress when program costs increase significantly. The Pentagon must then certify to Congress that the program is still worth pursuing.

But a breach of the Nunn-McCurdy law usually leads to a significant restructuring of a program. It could also force the Pentagon to find an alternative to the JSF program, or prove that no alternative exists.
The F-35 program “has fallen short on performance in the last few years,” Carter said during the hearing. “That is unacceptable.”

The program has suffered significant setbacks and has been the subject of continuing reviews by the Pentagon in an effort to lessen program delays and reduce cost growth. Carter said the Pentagon has restructured the program and treated the overhaul in the same manner it would handle the Nunn-McCurdy breach.

GAO’s Sullivan offered a less optimistic outlook for the program, despite the restructuring. Sullivan said that the F-35 still faces “significant risk.”

The F-35 program “will require exceptional levels of funding for a sustained period through 2034, competing against other defense and non-defense priorities for the federal discretionary dollar,” Sullivan said in his prepared statement.

“To date, the department does not have a full, comprehensive cost estimate for completing the program. Credible cost and schedule estimates are critical because they allow [Department of Defense] management to make sound trade-off decisions against competing demands and allow Congress to perform oversight and to hold DoD accountable.”

Roxana Tiron is a correspondent for The Hill, from which this article was adapted.