The Pentagon, JSF and the Sacrificial Goat
(Source: defense-aerospace.com; published June 5, 2008)

(*: Sen. Levin's JSF unit price corrected on June 9 -- was initially quoted as $110 million)
By Giovanni de Briganti

PARIS –-- The Senate Armed Services Committee’s June 3 hearing on the cost of Pentagon weapon programs has thrown up a couple of nuggets that demonstrate just how politically vulnerable the Joint Strike Fighter program has become.

In his opening statement , SASC Chairman Carl Levin quoted a recent Government Accountability Office (GAO) report which estimated that recent cost overruns on the Pentagon’s 95 major weapons programs amount to $295 billion.

To put that figure into perspective, Levin said, “For $295 billion, we could buy, at current prices, two new aircraft carriers for $10 billion each and 8 Virginia class submarines for $2.5 billion each, and 500 V-22 Ospreys for $120 million each, and 500 Joint Strike Fighters for $100 million each (emphasis added-Ed.), and 10,0000 MRAPs for $1.4 million each -- all of that and still have enough money left over to pay for the entire $130 billion Future Combat System program."

Two of these figures deserve special attention.

The first is the $100 million that Levin quotes as the current unit price for the Joint Strike Fighter. This is the first time an official source has conceded that the JSF will cost substantially more than the $55-$65 million consistently quoted by the Pentagon and Lockheed Martin.

While neither it nor the Pentagon has challenged Levin’s figure, Lockheed continues to quote far lower prices to customers. Referring to a possible JSF sale to Israel, Lockheed spokesman John Smith told Reuters June 4 that the "average unit recurring flyaway costs" for the F-35A "have remained stable in the upper $40 million range in baseline 2002 dollars,” which is at variance from all other estimates.

(Admittedly, Levin’s price is in current dollars, while Lockheed’s is in FY2002 dollars, but six years of 3% inflation would increase Lockheed’s price by less than 20%, to well under $50 million.)

Levin’s $100 million price tag vindicates the GAO’s statement, set out in a March 11 report , that it has no confidence in the ability of the Joint Strike Fighter program office to accurately estimate costs.

GAO’s doubts were bolstered this week when the Project On Government Oversight, a watchdog group, released the executive summary of a November 2007 report by the Pentagon’s own Defense Contract Management Agency (DCMA) that states, in a nutshell, that Lockheed is virtually unable to control costs on the JSF program and that its system for tracking costs and schedules has generated "useless" or "suspect" data.

Lockheed’s John Smith separately said the company has "worked closely" since November with the DCMA and that "an approved corrective action plan" is in place, but this does not detract from the fact that the company is alone in finding its price data credible.

Levin’s second figure is the $295 billion value of the cost overruns. By coincidence, this is also the latest cost estimate for the JSF program, according to the Pentagon’s latest Selected Acquisition Report. The Pentagon could buy the same weapons listed by Levin simply by cancelling the JSF – and have $55 billion left over by not buying the 500 JSFs he lists. Congress might be tempted to compensate for the Pentagon’s cost overruns at a single stroke by axing the JSF, a program that has few enthusiastic backers in the US Air Force and the US Navy.

A separate development this week again raises the question of the degree of sovereign control that foreign JSF partners will have over their own aircraft. Britain, the program’s largest foreign partner, has been insistent on having full control of the aircraft’s software source codes and other technologies, such as stealth coatings, that would allow it to autonomously operate, modify and upgrade its JSFs.

In a June 4 report , Britain’s National Audit Office found that the UK Ministry of Defence had been unable to modify eight Chinook Mk 3 helicopters it had bought in part because “Boeing and its sub-contractors, in seeking to protect their intellectual property rights, resisted the [MoD]’s requests for access to the source code.” This meant that only Boeing could carry out the necessary modifications, and “In the end it took 30 months for [MoD] and Boeing to agree an affordable programme of work….The final estimate for the in-service date was 2011-12 with a predicted cost of £215 million,” the NAO reports.

Given this painful experience, the British are likely to be even more insistent on obtaining full access to JSF source codes and technologies, which the United States may be unable to grant even if it wanted to because of the restrictions imposed by its own International Traffic in Arms Regulations (ITAR).

In a nutshell, the JSF’s unit price is twice as much as that quoted by the manufacturer, whose cost data is suspect anyway; the program is running late and is still years away from attaining its performance goals; and only Turkey, out of eight foreign partners, has so far confirmed it will buy the aircraft.

While it has not yet become a political liability for its backers in Congress, the JSF program is dangerously close to becoming the poster child for the brutal reform of the Pentagon’s weapons acquisition process that now seems inevitable.

To mix metaphors, the Pentagon needs a sacrificial goat to mollify its many critics, and JSF fits the bill better than most.

-ends-




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