The deliberations currently under way on the future of the F-35 Joint Strike Fighter program have far reaching implications for the US armed services, the armed services of partner nations, future defence budgets in all of these nations, and no less importantly, the widely marketed intent by the Obama Administration to reform the ailing US defence procurement system.
If the Hon Ashton Carter and his Team make the wrong choices, the consequences will reverberate for a very long time. To see why, we need to drill into the background to the JET I and II reviews, and earlier budgetary plays surrounding this program.
The JET Mark I review was constrained to only look at cost and schedule estimates and only for the 2010 - 2015 timeframe. In other words, not to consider the current year proposal activities for the President's Budget (PB), since they were already underway, and only consider forward estimates for the five year projection (FYDP).
JET Mk II was likely similarly constrained to these metrics over this timeframe.
Both have reported what would normally be considered SEVERE consequences in terms of massive cost overruns (~$17 Billion) and similarly huge delays in schedule (2 - 3 years).
Because of the level of concurrency in the design, development, testing and production of this program, it is hard to tell when the physical aspects of the SDD Phase cease and the production of the aircraft begin. However, under the DoD 5000 Acquisition System, approval of Full Rate Production (FRP) as opposed to Low Rate Initial Production (LRIP) occurs at Milestone C and, by law, this is not supposed to happen till the aircraft has passed the tests of initial operational test and evaluation (IOT&E) and the results are presented to the Congress.
Therefore, it would be fair to say, the currently approved cost provisions (the Budget) do not include the Procurement Budget that would have been the bulk of the pre-Jet Mk I & II and pre-GFC total program budget estimate of $350+ billion.
The pre-Jet/pre-GFC budget for the SDD Phase and the currently planned 8 x LRIP phases of this program, combined, is steeped in creative presentation and interpretation. However, a conservative estimate, favourable to the JSF Program, would see this budget figure (the currently approved cost provisions) at something less than $50 billion.
As such, the JET Mk I and Mk II cost estimates constitute a blowout in the currently approved cost provisions in excess of 35%.(end of excerpt)
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