GAO: F-35 program should undergo affordability assessment
By BARRIE BARBER | Dayton Daily News, Ohio | Published: April 17, 2014
DAYTON, Ohio (Tribune News Service) — The Pentagon's most expensive weapons program ever — the F-35 Joint Strike Fighter — should undergo an affordability assessment, according to the Government Accountability Office.
Michael J. Sullivan, GAO director of acquisition and sourcing management, said in written testimony to Congress that engine reliability in the F-35 program was "extremely poor" and could require "more time and resources than originally planned."
The F-35 within the past year has experienced an engine failure and computer software issues.
In a report this week, the federal watchdog agency questioned the affordability of the fifth-generation jet. The Pentagon continues testing of the stealthy plane and plans a ramp-up in production as the F-35 competes for funding with new weapon systems such as a nuclear ballistic missile submarine, a long-range strike bomber and an aerial refueling tanker.
F-35 costs of $12.4 billion a year would consume 25 percent of the Pentagon's major acquistion budget in each of the next five years, GAO said.
"There's no political appetite to cancel the (F-35) program ... but we're definitely going to have to buy fewer of them," said Mandy Smithberger, director of the Straus Military Reform Project at the Project on Government Oversight. "The GAO findings of how unaffordable this program is are pretty chilling, particularly as the (Defense) Department is taking on a number of very expensive programs this year."
F-35 manufacturer Lockheed Martin and engine-maker Pratt & Whitney disagreed with the GAO's latest findings and a top government official said while the report was factually correct, program officials did not agree with all of the report's conclusions. Program officials noted costs have declined and the weapons program is on track under a schedule set four years ago.
"I understand why these oversight people are cautious, but it does appear to be getting better," said Richard Aboulafia, an aviation analyst with the Virginia-based Teal Group. "The costs have been shrinking, which is the first time that has been happening in many years, which is positive news."
An F-35 program office at Wright-Patterson Air Force Base employs 115 people who work in engineering, program management, logistics and finance.
The $391 billion program would purchase 2,457 aircraft over the next two decades to replace aging planes with three different variants for the Air Force, Navy, and Marine Corps.
Eight other nations have invested in the jet. In development since 2001, the GAO found with two years and 40 percent of the most complex testing to go, "more technical problems are likely." The Air Force, which plans to buy 1,763 of the single-engine jets, has set initial operating capability for 2016.
U.S. Rep. Mike Turner, R-Dayton and chairman of the House Tactical Air and Land Forces subcommittee, chaired a committee hearing on the plane this week. Turner said he has closely monitored program costs and concerns, and recently traveled to Eglin Air Force Base in Florida to talk with F-35 pilots and maintainers.
"I understand the substantial investment in the F-35 is more about the requirement for fifth-generation tactical fighter capability than it is about the F-35 itself," he said in a statement. "The F-35 will be expensive as the GAO has noted and affordability is a concern, but this capability is a critical requirement for our national security."
Pentagon officials have said the most advanced software testing could be four to six months behind schedule while earlier software versions undergo testing. The jet has eight million lines of software code, the most in any aircraft.
The Pentagon agreed with the GAO on the need for an affordability assessment. Costs were expected to reach $1 trillion over the life of the aircraft, GAO said.
Phillip Lohaus, a defense research fellow at the American Enterprise Institute, said historically that GAO has been "quite bearish" on the F-35, but Congress has viewed it as a priority and may add overseas contingency funding to the budget to help pay for the jet.
In a written statement, Lockheed Martin noted the F-35 costs have dropped 57 percent over eight contracts and further savings were expected. The company also noted a $60 billion decline in operational and sustainment cost projections.
Air Force Lt. Gen. Christopher C. Bogdan, program executive officer, said affordability "remains our number one priority."
"Although the GAO report is factually accurate, the (Joint Program Office) does not fully agree with all of the conclusions, and finds the report, in some instances, contains statements that do not provide proper context or qualifying information, possibly leading readers to form inaccurate conclusions," he said in a written statement.
Over the past five years, program costs have stabilized and cost projections dropped $7.5 billion from the prior year, the three-star general said. Lockheed Martin expects acquistion costs to drop an additional $1.6 billion by the end of the decade, the company said.
Program officials say aircraft availability and mission-capable rates have risen.
"We have technical solutions in work for developmental discoveries, we continue to focus on and improve reliability and maintainability, and we remain committed to delivering all the combat capabilities the warfighter needs when they need them," Bogdan said.
Since Lockheed Martin began production deliveries in 2011, the aerospace maker has delivered 130 of the jets, according to defense officials.
Among other things, GAO cited a structural failure on a F-35B durability test aircraft for the Marine Corps variant, an F135 engine fire last summer on an F-35A variant the Air Force flies that grounded the jets for a month, and ongoing concerns about computer software.
While the report said Lockheed Martin's manufacturing efficiency has improved, it called into question whether it could ramp up to meet production goals while facing parts shortages from suppliers. The Defense Department has targeted buying 38 planes this year and increasing to 90 in 2019.
Pratt & Whitney spokesman Matthew C. Bates said in an email that the engine-maker disagreed with GAO findings. He noted the price for the F135 engines have declined by 55 percent since initial production. The report "incorrectly measured reliability" without crediting new designs in the fleet, he added.
The engine for the Air Force and Navy fighters is at 95 percent of its requirement, he said. The F-35B, or the Marine variant that can take off and land like a helicopter, is at 56 percent, which has "nearly doubled since 2013," he said in an email.
The F-35C, the Navy version, landed and took off 124 times in recent test flights on an aircraft carrier without engine difficulties, he said. The Air Force uses the same engine in the F-35A, he said.
"While the report lists some propulsion reliability concerns, the F-35 Joint Program Office and Services have validated and approved our upgrade and design changes that will enhance reliability for the fleet and minimize both cost increases and schedule delays," he said in an email.
The GAO blamed F-35 higher costs and delays on inadequate knowledge of critical technologies and designs when the program started in 2001, and a "concurrency" strategy to buy operational aircraft before testing finished.
"None of the aircraft delivered currently possess initial warfighting capability and are being used primarily for training purposes," the report said. GAO has estimated retrofits and design changes on aircraft will cost $1.7 billion.
"These are just costs the taxpayer is going to have to eat later," Smithberger said. "If you slowed down production, you do have the ability to avoid a lot of cost overruns and waste."
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