F-35's 'grotesque' overruns are now past, Pentagon's chief says
By TONY CAPACCIO | Bloomberg | Published: January 18, 2017
Lockheed Martin's F-35 jet "has come a long way" since "grotesque" cost overruns and schedule delays plagued the costliest U.S. weapons system, departing Defense Secretary Ash Carter said in an appraisal at odds with the view of President-elect Donald Trump.
Because the $379 billion program is critical to three U.S. military services and many allied air forces, "it's essential that it perform both in technology and in cost terms, and we've got to keep working on that," Carter said in an interview Tuesday.
Carter didn't respond directly to Trump's tweet last month that F-35 costs are "out of control," or his message Tuesday that boasted of "the massive cost reductions I have negotiated on military purchases." Trump has extracted general promises to cut costs on Lockheed's F-35 and Boeing Co.'s new Air Force One after meetings with the chief executive officers of those two biggest U.S. government contractors.
Carter reflected on the F-35's progress since he certified in June 2010 that the program was worth continuing even though its rising projected cost breached congressional limits.
The program was "near collapse and disgrace" when he first wrestled with its status in 2009 as undersecretary of defense for acquisition, he said, "because the development phase" was "grotesquely overrun in cost and behind in schedule." He said "we needed to instill discipline" and "eventually that was done."
Carter also said the program made significant changes to use fixed-price incentive fee production contracts to put more Lockheed profit at risk.
Two hundred of the U.S. program's planned 2,443 aircraft have been delivered, and as of last year Congress had authorized about $110 billion in spending. "The things that need to be done" include applying "continued pressure on production costs," he said.
"Never forget," he added, that the support phase of the F-35 includes "the lion's share" of the expenses. In addition to the $379 billion in projected research, development and procurement, the fleet will require more than 50 years of support estimated by the Pentagon's independent cost analysis unit to add up to as much as $1.2 trillion.
Highlighting the promised capability of an aircraft that's been dubbed a flying computer because of its eight million lines of software code, Carter said, "If we stay on course, no other fighter aircraft in the world will come close to competing with" the F-35 "for performance and cost, and we will wipe out all competition."