PARIS --- So now we know. Despite the best efforts of Lockheed Martin and the JSF Program Office (JPO), despite what top Pentagon officials had testified during hearings on the FY 2011 defense budget, the Senate Armed Services Committee finally heard on March 11 that the F-35 Joint Strike Fighter has experienced cost overruns of such a magnitude (over 50%) that it has breached the Nunn-McCurdy ceiling that requires the Pentagon to re-certify it.
Air Force Secretary Donley will formally notify Congress of JSF’s Nunn-McCurdy breach by April 1, although the Pentagon has been working on the assumption that a breach had occurred since November 2009.
Admittedly, most of what emerged during the hearing had already been reported by the trade press, albeit in bits and pieces. The very significant difference is that that information is now as official as it can be, provided as it was by top Pentagon acquisition officials to a Congressional committee. And, as such, it cannot be challenged, as were the press reports, the GAO reports and the JET II cost estimates, by the manufacturer and the Program Office.
To gauge the significance of moving all that follows from “press speculation” to the congressional record, it is worth noting that Ashton Carter, the Under Secretary of Defense for Acquisition, Technology, and Logistics, had to admit during the hearing that telling the truth “has not always been done on this program.” And that he promised Senators, with Churchillian overtones, that “I can give you realism, but I can’t give you optimism” before pledging to “relentlessly pursue affordability.”
So, what did we learn from the hearing? Leaving program specialists to go over the hearing with a microscope, these are the most significant facts that emerged:
--We now know that Initial Operational Capability (IOC) for the US Air Force and US Navy has slipped by another year, to 2016, while the Marine Corps still (inexplicably?) clings to 2012 for its own IOC.
--We now know that, expressed in 2002 dollars, the average cost of an F-35 aircraft has risen from $50.2 million in 2001 to $80-$95 million today. The average procurement unit cost is, in today's dollars, estimated at $112 million.
--We now know that, since 2007, total estimated acquisition costs have increased $46 billion and development extended 2 ½ years, compared to the modified program baseline approved that year.
--We now know the newly restructured JSF program will only deliver aircraft at the above prices, and at the above dates, if and only if nothing else goes wrong during the remaining development and flight tests; and if Lockheed and the Pentagon commit no management or technical blunder. This is a best-case scenario.
--We now know that Lockheed Martin is so uncertain of its performance that it is refusing to shift its Low Rate Initial Production contracts from a “cost-plus” to a “fixed cost” basis. The Pentagon hopes to move to a fixed-cost contract for the fifth LRIP contract in FY12, but has little leverage to ensure this happens.
--We now know that, apart from Maj. Gen. David Heinz being replaced as JPO chief, no heads have rolled at the Pentagon or the services as a consequence of the JSF delays and overruns. There has been no accountability in the program.
--We now know that the level of concurrency between development and production is still “unprecedented, but it is being mitigated,” according to Carter.
--We now know that, in advance of its annual report on the JSF due out this month, the GAO considers that the JSF program "continues to struggle with increased costs and slowed progress—negative outcomes that were foreseeable as events have unfolded over several years. At the same time, progress on flight testing is behind schedule—slowed by late aircraft deliveries and low productivity, the flight test program completed only 10 percent of the sorties planned during 2009."
--We now know that the cost overruns were caused by larger-than-planned development costs driven by STOVL variant weight growth and longer forecasted development schedule; increase in labor and overhead rates; degradation of airframe commonality; lower production quantities; increases in commodity prices (particularly titanium); and major subcontractor cost growth.
--We now know, thanks to Michael Gilmore, DoD’s Director of Operational Test and Evaluation, that there is a new system vulnerability issue that he describes thus:
“The program office is executing a comprehensive, robust, and fully funded Live Fire test plan. However, the program’s recent removal of shutoff fuses for engine fueldraulics lines, coupled with the prior removal of dry bay fire extinguishers, has increased the likelihood of aircraft combat losses from ballistic threat induced fires.
“F-35 live fire testing to date has shown that threat impact into fuel tanks results in sustained fires. In addition, the F-35 will be more vulnerable to typical non-combat fires caused by fuel leaks and other system failures without the fire-suppression systems. At present, only the Integrated Power Plant (IPP) bay has a fire suppression system.
“Though the configuration control process has approved the program office’s request to remove these safety systems as an acceptable system trade to balance weight, cost, and risk, I remain concerned regarding the aircraft’s vulnerability to threat-induced and safety-related fires.” (This quote is excerpted from Gilmore’s prepared statement, which he did not read out during the hearing—Ed.)
--We now know that Senators are grateful to Carter and his team for having answered their questions, that Senators recognize these officials have a tough job, and that it was then time to break for lunch. No mention of a follow-up, no prospect of a big stick being wielded by the committee, no sense that there will be consequences if the program doesn’t improve.
For future reference, we reproduce below this excerpt from Ashton Carter’s testimony:
“The next two years will be critical ones for JSF, with delivery of test aircraft to Patuxent River and Edwards AFB, completion and analysis of hundreds of test flights, and commencement of flight training at Eglin AFB this year, and a number of key milestones in 2011, including:
-- Initial Marine Short Take Off and Vertical Landing (STOVL) sea trials with Navy amphibious assault ship (LHD);
-- Completion of initial land-based carrier catapult and arrested landing testing at Lakehurst, NJ and Patuxent River, MD.
-- Release of Block 2 software to flight test;
-- Completion of static structural testing of all three variants;
-- Mission training initiated at Eglin AFB with Block 1 software;
-- Delivery of all LRIP 2 (12 aircraft) and at least 13 of 17 LRIP 3 US and Partner aircraft.
The current program plan, as revised, stands up the first training squadron at Eglin AFB in 2011, and delivers operational aircraft (Not to be confused with IOC—Ed.) to operational squadrons for the Marine Corps 2012, the Air Force in 2013, and the Navy in 2014.
Click here for the Senate Armed Services Committee page for the March 11 hearing, where witness opening statements are available.
Click here for a webcast of the hearing, also on the SASC website.