Air Force: Joint Strike Fighter delayed, will cost much more than once expected

The high-profile F-35 Joint Strike Fighter program will be delayed by two years and will be significantly over cost, Air Force Secretary Michael Donley said on Tuesday.

“We think it is probable that there will be a Nunn-McCurdy breach,” Donley said at a breakfast with defense reporters.

The so-called Nunn-McCurdy law requires the military services or the Pentagon leadership to tell Congress when the price tag of a program increases significantly. The Pentagon then must certify to Congress that the program is still worth pursuing.

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Under a new weapons acquisition law, Nunn-McCurdy is triggered when the estimate of the total program cost grows by more than 25 percent or the program schedule for initial operational capability grows by more than 25 percent.

A breach of the Nunn-McCurdy law usually leads to a significant restructuring of a program, or could force the Pentagon to find an alternative to the offending program.

The F-35 is the Pentagon’s most expensive program to date, 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.

The program, under contract to Lockheed Martin, has suffered significant setbacks and has been the subject of continuing reviews by the Pentagon to tamp down delays and cost growth.

The Pentagon has been acting “in just about every respect as if the program were in a Nunn-McCurdy breach,” Donley said. “We’ve been taking all the mitigating and corrective action that we would take as if it were a Nunn-McCurdy breach.”

Donley said the Air Force remains “fully committed” to the program, but that the fighter jet will become operational in 2015, about two years later than initially planned.

Donley indicated that the Pentagon will stick by the F-35 because there is no other alternative and because it would be more expensive to stop the production lines and then restart them.

“We have not seen any technical show-stoppers” with the F-35, Donley said.

Donley’s comments dovetail with a memo issued last week by the Pentagon’s top weapons buyer, Ashton Carter, and first reported by The Hill. In the memo, Carter said the Pentagon's review of the F-35 so far had discovered no fundamental technology or manufacturing problems.

Carter also said a recent independent Pentagon assessment done by the so-called Joint Estimating Team found the development phase of the next-generation fighter jet will slip by 13 months, not 30 as initially determined by a previous assessment.

Carter also said the cost of the system’s development phase will increase by $2.8 billion. Carter directed the secretaries of the Air Force and Navy to budget according to the new estimate. He directed them to extend the development phase by 13 months and move the start of the full production phase to November 2015.

Carter also directed the Air Force and Navy acquisition officials, as well as the program manager for the F-35 program, to withhold $614 million in award fees to Lockheed Martin and revise the contract structure for the development and demonstration phase in such a manner that Lockheed is rewarded for “measurable progress.” Gates already announced earlier this month that he was planning to withhold the money from Lockheed. 

“I remain convinced that close partnership and clear accountability are required with the JSF contractors,” Carter said in the memo. 

Donley said Tuesday that the Pentagon is restructuring its contract with Lockheed Martin to ensure the company sticks to its earlier promises on the program and meets the schedule.

Also, Donley pointed out that the new program manager for the F-35 program would be a three-star officer and therefore would need to be confirmed by the Senate. But Donley said he was unclear when a new program manager would be named. Gates decided last month to remove Marine Corps Maj. Gen. David Heinz, who was running the F-35 program. 

Because of the two-year delay to 2015, Donley said the Air Force is considering extending the life of the F-16 fighter jets, also made by Lockheed, but he indicated that no final decisions had been made.

Meanwhile, Donley held his ground on another controversial issue: the backup engine for the F-35, which the Pentagon does not want but Congress has consistently funded over the past several years. Gates said that he would personally recommend that the president veto any defense bill that contains funds for the alternate engine made by General Electric and Rolls-Royce. The primary engine is built by Pratt & Whitney.

Donley said it was a difficult call to decide against a second engine for the F-35, because “we know Congress wants to support it” and because, in general, the Pentagon sees “the value of competition.” Donley said that the Pentagon could not see any “hard savings” later on from having two competing engines.

“It was too fuzzy in the out-years,” he said.

Rep. Ike Skelton (D-Mo.), the chairman of the House Armed Services Committee, last week blasted the Pentagon’s business rationale for deciding to scrap the General Electric-Rolls-Royce alternate engine. The primary engine is built by Pratt & Whitney.

“It appears that the department’s approach focuses on near-term costs to the exclusion of what the committee sees as the long-term benefits of this program,” Skelton said in a statement Thursday. “I remain unconvinced that terminating the alternate engine program makes sense.”

Skelton said the Pentagon’s analysis does not consider the risk that a single engine would present to national security because Lockheed Martin’s F-35 will account for 95 percent of the military’s fighter fleet.

“We cannot use near-sighted vision when long-term security is at stake,” Skelton said in the statement.