JSF program faces steep cost overruns

JSF program faces steep cost overruns [Me: eek! and even more delays]

By Kimberly Johnson - Staff writer

Posted : Saturday Mar 15, 2008 7:49:23 EDT

The Joint Strike Fighter program is facing $38 billion in cost overruns and could be delayed by more than two years, according to a government report urging defense planners to re-evaluate the program.

The delays could affect the Navy’s schedule for the carrier variant of the plane. The service is already facing a fighter-jet gap with F/A-18 Hornets projected to die out before they’re replaced by the JSF. Service officials say they plan on buying more F/A-18 E/F Super Hornets to bridge the gap.

The almost $1 trillion program — the largest in defense history — has already ballooned more than $23 billion during the past year of development because of changes in procurement costs, according to the Government Accountability Office’s March 11 report.

Additionally, three separate defense offices found that initial cost estimates for the program were understated by $38 billion and that development will be delayed by 12 months to as much as 27 months, the GAO said.

It’s a red flag warranting an independent, life-cycle cost-estimate review of the entire program, the GAO said. Such a review should come before a review already planned for 2013.

Shift from testing could create problems

Last year, program managers put into place a Mid-Course Risk Reduction Plan, since they feared almost-certain cost overruns in the plane’s development phase. That plan shifted money away from testing and toward management reserves, which cover expenses related to technical issues that can emerge in development — engineering drawings, production materials and labor, for example. But the decision to put that plan into place came with a consequence, the GAO said.

Moving the money increased the risk of not completing testing on time, and not finding design problems early enough to prevent them from becoming costly, the report states. Furthermore, the report says the plan did not take up the issue of why the cost overruns were occurring in the first place.

“Two-thirds of budgeted funding for JSF development has been spent, but only about one-half of the work has been completed,” the GAO reported.

Concerns such as these in early government assessments could spell trouble for the services counting on the aircraft in the long term, said Bob Work, a defense analyst for the Washington, D.C.-based Center for Strategic and Budgetary Assessments.

The JSF program’s reach across the services is wide. The fighter’s F-35A version, which will perform conventional takeoffs and landings, and the F-35C carrier variant are favored by the Air Force and Navy, respectively. The Marine Corps wants the F-35B short- takeoff/vertical-landing variant.

The Navy Department plans to buy 680 F-35s, which covers both Navy and Marine versions. The first operational Marine version is scheduled to join the fleet in 2012, and the first aircraft carrier version in 2015, Lockheed Martin spokesman John Smith said.

Smith said he didn’t have a Navy/Marine breakdown of the total 680 number, but Marine Maj. Eric Dent said the Corps plans to buy 420 aircraft.

Delay may be disaster for Corps

Delays with JSF delivery will exacerbate the problem of aging aircraft, Work said.

“How the JSF goes will really have an impact on all the services’ plans,” he said.

Furthermore, significant delays could threaten the Corps’ STOVL version, already under the gun because of disagreements among Navy and Marine leaders as to how it should be incorporated into the fleet, Work said.

“The Marine Corps has pretty much bet the farm on JSF,” Work said.

The magnitude of the JSF program prompted a congressional mandate that the GAO review its progress incrementally. The attention could be just beginning.

“Any hint of an overrun is just going to raise the level of scrutiny and interest,” Work said.

Despite the findings in the GAO audit — one of about a dozen assessments the program undergoes each year — the JSF program remains on target, countered a project spokesman.

Even if the total cost for the F-35 over its planned 35-year service life does adds up to $1 trillion, as the GAO report indicates, that’s still less than the total cost for operating all the varieties of aircraft it’s replacing, Smith said.

The F-35 Joint Program Office prepares an annual Selected Acquisition Report, which estimates the procurement cost, Smith said in an e-mail. The next report will be issued “in the near future,” he said.

“The bottom line is — and I’m not being flip about it — we have to take a step back and, if you remember our job is to produce all these things we described and do it in a responsible manner, this is one of the most cost-effective programs out there.”

Find NavyTimes article here.