Cost Estimate for F-35 to Soar, Pentagon Says

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The Star-Telegram

Cost Estimate for F-35 to Soar, Pentagon Says

by
Bob Cox

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)

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.

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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