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F-35’s $1.2 billion savings claim dwindles, Senate panel finds

An F-35 Lightning II flies away from Spangdahlem Air Base, Germany, June 18, 2019.

BRIAN FERGUSON/STARS AND STRIPES

By TONY CAPACCIO | Bloomberg News | Published: September 17, 2019

WASHINGTON (Tribune News Service) — The Pentagon’s F-35 program office promised $1.2 billion in savings from buying parts and equipment in bulk for Lockheed Martin Corp.’s fighter jet, but it now estimates only about a third of those savings, according a Senate panel.

The estimate of $435 million saved from buying in bulk was disclosed by the Senate Appropriations Committee in the new report accompanying its defense spending bill for fiscal 2020.

While the Defense Department has boasted of progress in controlling costs of the F-35, the most expensive U.S. weapons system, the shortfall on savings from bulk-buying underscores the continuing challenge for a fleet of planes expected to cost at least $428 billion to develop, build and upgrade. Additionally, it will cost as much as $1.1 trillion to support and maintain the fleet through 2077.

F-35 program officials sought and won congressional approval in 2017 to spend $661 million as a down payment on parts for 207 U.S. aircraft to be purchased this year and in 2020. The pitch was that this would save $1.2 billion for the U.S. and allies that buy the fighter, split evenly.

Officials testified to Congress that the estimated savings were validated by in-house evaluators, "an industry analysis and an independent assessment conducted by Rand Corp."

The latest estimate of $435 million in savings follows an earlier projection of $595 million from the Pentagon’s independent cost analysis office, according to the committee.

"The committee notes that the actual savings will be realized and confirmed when parts are delivered," the panel said in its report, which directed the F-35 program office to provide a final tally of the savings no later than 30 days after passage of the final fiscal 2020 spending bill.

A spokesman for the F-35 office didn’t have an immediate comment on the Senate report.

Despite the skeptical note on cost savings, the Appropriations panel added 18 F-35s to the Pentagon’s request for 78; its House counterpart added 12. A final number would have to be negotiated in a House-Senate conference.

The F-35 continues to undergo congressionally mandated operational combat testing needed before Pentagon acquisition chief Ellen Lord decides whether the aircraft can enter full-rate production — the most lucrative phase for Bethesda, Md.-based Lockheed. That decision is scheduled for December.

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