Fighter jet's costs jump more than 50 percent

By Megan Scully

March 11, 2010

The Pentagon will notify Congress within the next several days that costs for the F-35 Joint Strike Fighter have ballooned more than 50 percent since the program began in 2001, senior defense officials told the Senate Armed Services Committee Thursday.

The cost increase means the Pentagon's largest program will breach the 1982 Nunn-McCurdy cost-control law, triggering a congressional review and forcing the Pentagon to prove the program is critical to national security to protect the Lockheed Martin Corp. fighter from termination.

"I'd like to do better and I'd like to challenge the contractor to do better -- more jets, faster, cheaper," Pentagon acquisition chief Ashton Carter told the committee during a hearing focusing exclusively on the F-35.

Carter added that the Pentagon must place emphasis on restoring affordability to a fighter jet whose primary selling point -- both in the United States and to allies who have agreed to buy the jet -- had been its price tag.

In 2001, the Pentagon estimated that the average price per plane would be $50.2 million, based on 2,852 aircraft for the Air Force, Marine Corps and Navy. The Pentagon now plans to buy 2,443 JSFs at an average price, in constant 2002 dollars, of $80 million to $95 million per jet.

Christine Fox, the Pentagon's director of cost assessment and program evaluation, said the Defense Department is in the process of determining the specific average prices per aircraft and will send that information to Capitol Hill by June.

For fiscal 2011, the Pentagon is requesting $8.7 billion in procurement funding to buy 43 F-35s -- for a cost of more than $200 million per jet. Systems bought early in the life of a weapons program typically cost more than those procured at the end of the program.

The Nunn-McCurdy breach marks the latest blow to a program whose development stage has been marked by steady cost increases and schedule delays.

Due to problems with the program, Defense Secretary Robert Gates on Feb. 1 announced plans to prolong and invest more heavily in the F-35's development phase while withholding $614 million in award fees from Lockheed Martin.

Despite the changes to the program, Michael Sullivan, the Government Accountability Office's director of acquisition and sourcing management, told the committee Thursday there is "still significant risk," including the program's ability to deliver the expected number of aircraft on time.

By Megan Scully

March 11, 2010