Gates confident F-35 program will stay on track despite costs

Defense Secretary Robert Gates told defense appropriators on Wednesday that he was confident the troubled F-35 Joint Strike Fighter will stay on track after the Pentagon restructured the program.

Gates told the House Appropriations Committee that he did not expect any more delays or cost increases to the F-35.

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The Pentagon is expected to formally notify Congress soon that the F-35’s cost has more than doubled.

Officials repeatedly have said that they have restructured the program to prevent it from derailing. They also say no other alternative exists to the F-35—the next-generation fighter jet for the U.S. military and several of its allies.

“Based on everything that I have seen, I have confidence that the range of cost estimates and timing that is being described and presented to me today will in fact be executed,” Gates said on Wednesday.

Gates has fired the previous F-35 program manager and withheld $614 million in potential fee awards from the contractor, Lockheed Martin, as part of the program’s restructuring.

Gates faulted the program office for having provided “overly rosy” forecasts.

A three-star military officer, Vice Adm. David Venlet, has been nominated to take over the program. Chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, who also testified Wednesday, called Venlet “an exceptional individual.”

Gates also expressed frustration that one factory involved in the F-35 program was using only six percent of its floor space for the F-35 compared to other aircraft programs.

“We're paying 70 percent of the overhead for that factory. I think we can fix that,” Gates told lawmakers.

In his example, Gates was not referring to Lockheed Martin, the prime contractor for the F-35, said Geoff Morrell, the Pentagon press secretary. Morrell said he could not disclose the name of the factory in question, citing proprietary concerns.

The restructured program adds 13 months and $2.8 billion to the development phase and slows the ramp-up to full production.  The Navy and the Air Force will begin fully operating the F-35 in 2016. The Marine Corps plans to start operating its version of the fighter in December 2012.

The Air Force, Navy and Marines each will have their own versions of the F-35.

Gates also told lawmakers that the Pentagon is looking at a third multiyear contract for Boeing’s F/A-18 E/F Super Hornets. No formal decision has been made yet in terms of accepting Boeing’s price offer for the multiyear deal, but such a move would alleviate several lawmakers’ concerns that the Navy and Marine Corps would face a shortfall of fighter jets in the coming years –particularly with the delays in the F-35 program. The Super Hornets are expected to share the carrier decks with the F-35 until 2030.

Meanwhile, Gates and other high-level Pentagon officials have dug in their heels against a backup engine for the F-35 and have offered their rationale and calculations to the defense committees. Gates reiterated on Wednesday that he would personally recommend that the president veto the defense bills over the alternate engine made by General Electric and Rolls Royce. The primary engine is built by Pratt & Whitney.

In an updated analysis, the Government Accountability Office found that the Pentagon would have to spend another $62.5 billion to cover the costs of completing the primary engine development; the procurement of 2,443 engines and supporting and sustaining production. An additional investment of between $4.5 billion to $5.7 billion may be required should the Pentagon continue competition between the two engines, the GAO found.

“Under certain assumptions, the additional costs of continuing the F136 alternate engine program could be recouped if competition were to generate approximately 10.1 to 12.6 percent savings over the life of the program,” Michael Sullivan, GAO’s director for acquisition and sourcing management said in prepared testimony before the House Armed Services Air and Land Forces subcommittee.

For example, Air Force data on the first four years of competition for engines on the F-16 fighter jets projected they would recoup at least that much, Sullivan said.

“Actual savings will ultimately depend on factors such as the number of aircraft actually purchased, the ratio of engines awarded to each contractor, and when the competition begins,” Sullivan said. “Competition may also provide non-quantifiable benefits with respect to better contractor responsiveness, technical innovation and improved operational readiness.” 

This story was updated at 6:31 p.m.