Britain cancels F35-B order. U.S. production order delayed an additional 12 months.

 Bill Sweetman 11/2/2010 5:50 AM CDT
Defense Secretary Bob Gates will be told in a meeting today that development of the F-35 Joint Strike Fighter will be further delayed, on top of the 13-month slippage that was disclosed in March.

According to Pentagon critic Winslow Wheeler, corroborated by Bloomberg and the New York Times, the USAF/international F-35A and Navy F-35C will be delayed another 12 months and the Marine’s F-35B – still suspended from powered-lift flight and reeling from last months’ bail-out by the UK – will be two to three years late. It’s not clear whether that refers to the completion of development testing or to the initial operational capability (IOC) date.

The operations and support costs for the F-35 will be re-budgeted as 1.5 times the aircraft it replaces, more than twice what was originally hoped for and 50 percent more than the most recent projections.

The changes are apparently the result of the Technical Baseline Review that the JSF Project Office launched in April, headed by new program manager Adm Dave Venlet and his new management team and supported by experienced personnel from Navair and Air Force Materiel Command.

The need for more time to mature the aircraft’s complex software is a big driver, although the longer delay to the F-35B points to flight-sciences or mechanical challenges with the powered-lift system. (At the International Powered Lift Conference last month in Philadelphia, engineers confirmed, for example, that a new driveshaft was still in the design stage.)

The direct financial impact is expected to be a $5 billion increase in research and development costs (currently budgeted at around $50 billion in then-year dollars). However, the damage to the program as a whole will be much greater and much of it is beyond the control of the JPO, the Department of Defense or even Congress.

The delays are almost certain to affect the ramp-up of production. As with the delay announced earlier this year, the added R&D costs are likely to be paid for by cutting US low-rate initial production (LRIP) orders, increasing the prices of those aircraft. Combined with delays in IOC dates, this will accelerate the pace at which international partners are moving their deliveries to the right.

The new Congress, meanwhile, may take action to prevent the delays from increasing the concurrency in the program. Under today’s production schedule, a one-year slip in completing development testing means that 150-plus more aircraft will be fully contracted for before DT is completed (the LRIP-8 batch, due to go on contract in early 2014) and 200-plus more before operational testing is done.

Customers will also have to figure out how many aircraft they can afford to operate, with basically flat budgets suggesting that total force requirements will have to be reduced by one-third. This will put at risk the 200-plus annual production rates on which the program’s projections of low average procurement unit costs have been based. For the USAF, this could mean other extra costs to extend the life of older fighters.

Finally, the entire management structure and culture of the Pentagon’s largest project, up to the highest levels, will come under scrutiny. The Pentagon’s Joint Estimating Team reported that the program was in trouble in September 2008, but was pooh-poohed by the JPO, Lockheed Martin and senior Pentagon leaders, including deputy defense secretary Gordon England and then acquisition chief John Young. In its second report, in November 2009, the JET warned of a 30-month delay – but that conclusion was watered down, once again, after the JPO and Lockheed Martin promised better performance.

Now it seems that the JET had it right more than two years ago. How many billions would have been saved if Gates had acted on those recommendations?

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