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Cost Estimate for F-35 to Soar, Pentagon Says

by Bob Cox

Defense Department officials have told Congress that the already ballooning costs of the F-35 joint strike fighter are likely to soar much higher when new estimates are completed in the summer.

Based on figures in a recent document, the average cost of one F-35 -- $62 million when the program was launched in 2002 -- could rise to $115.5 million, not counting inflation, by the time all 2,457 planes that the U.S. plans to buy are built. (Image: Lockheed Martin) In the Selected Acquisition Report for the F-35, a detailed document sent to Congress on Thursday, the Pentagon said it expects that cost studies now under way will produce estimates dramatically higher than those used in recent months to prepare the 2011 defense budget request.

Based on figures in the document, the average cost of one F-35 -- $62 million when the program was launched in 2002 -- could rise to $115.5 million, not counting inflation, by the time all 2,457 planes that the U.S. plans to buy are built.

Including inflation, the government now expects each F-35 to cost an average of $133.6 million. But even that figure could swell to more than $150 million when revised estimates are completed in June.

The report was obtained by the online news service InsideDefense.com, which reported it in a story posted on its Web site Wednesday. The Star-Telegram obtained its own copy of the report.

It shows that Pentagon officials now estimate that the average cost of one F-35 has risen 57 percent before accounting for inflation. It predicts that the next round of estimates could show an increase of up to 87 percent, again before inflation.

Further cost increases, coming on top of a wave of recent revelations about rising costs and lengthy delays on the part of contractor Lockheed Martin in getting planes built, will give additional ammunition to defense spending critics in general and F-35 critics in particular. They could also further delay purchasing decisions of potential foreign buyers, who are already nervous about the rising costs.

"The sticker shock for the F-35 is just now beginning to sink in; more sticker shock is to come as future revelations and developments continue to drive up the unit cost," said Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information and a former Senate committee staff member.

But Lockheed Martin spokesman Chris Geisel said in an e-mailed statement: "We can foresee no scenario in which F-35 unit costs are even close to the projections ... cited in the Inside Defense article."

The F-35 program has been the subject of much scrutiny and internal analysis since Pentagon officials conceded late last year that earlier, more optimistic predictions of costs and progress were hopelessly out of date and unrealistic.

The latest cost analysis indicates that the figures Pentagon officials used in preparing the 2011 budget and submitted to Congress still understate the likely cost of building the F-35s that are planned for the Air Force, Marines and Navy.

The new analysis says the Pentagon's earlier report was developed largely using cost projections by the F-35 Joint Program Office, which works directly with Lockheed and has consistently been too optimistic.

Defense Secretary Robert Gates said Feb. 1 that he had replaced the F-35 program office manager, Marine Gen. David Heinz, after reviewing the cost estimates for the 2011 budget.

In the report submitted to Congress, the average cost of an F-35 was estimated at $97.1 million before inflation, a 57 percent increase over the original estimate.

The total cost of the program was originally estimated at $178 billion. The latest estimate puts that figure at $328.25 billion, including inflation projections. That number was made public last week.

But language in the full report indicates that figure could rise by $40 billion to $50 billion.

When the public cost figures were released last week, Wheeler said they would prove optimistic. He said the projections in the detailed report are worse than he expected.

Geisel said the actual cost of building airplanes is now trending lower than expected. "We believe the final price per aircraft will be well below the independent estimates the government has adopted."

 

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