F 35 cost overrun

Hi gang, I just found this
Another cost overrun- for a change 🙂

WASHINGTON — The cost of developing the U.S. Joint Strike Fighter has already soared $11.9 billion over budget since the program began in 1996, and further overruns are likely as the $200 billion fighter jet program moves toward production, the General Accounting Office said on Monday.

The United States has signed agreements to jointly develop the highly modular fighter jet with Britain, Italy, the Netherlands and five other countries, and they are contributing over $4.5 billion toward the $33 billion development bill.

Lockheed Martin Corp. is the prime contractor for the F-35, a family of highly modular fighters being developed for the Air Force, Navy, Marine Corps and U.S. allies.

Current terms do not require foreign partners to pay for cost overruns, and the Pentagon has not asked its partners to cover any such increases to date, Katherine Schinasi, director of acquisition for GAO, told lawmakers.

“Future cost increases in the JSF program may fall almost entirely on the United States because there are no provisions in the negotiated agreements requiring partners to share their increases,” Schinasi told the national security subcommittee of the House Government Reform Committee.

Schinasi predicted costs would continue to rise, but gave no estimate by how much. “The JSF program is not immune to unpredictable cost growth, schedule delays and other management challenges that have historically plagued DOD’s (the Department of Defense) systems acquisitions programs,” she told lawmakers.

Foreign participation would help defray development costs for the JSF, but could exacerbate program challenges, and would clearly put pressure on Lockheed Martin as it balanced its partners’ expectations against the need to meet program milestones and keep costs under control, she added.

Maj. Gen. Jack Hudson, who heads the Pentagon’s JSF program office, confirmed foreign partners were not required to share in cost increases, but said the Pentagon reserved the right to ask for such contributions under “certain circumstances.”

He said he fully expected the foreign countries to help out if asked, because they also had a vested interest in the “health and future success of the program.”

The Pentagon did not ask its partners to help fund a recent $3 billion increase in development costs, because the growth was seen “within the scope of the existing agreement,” he said.

The U.S. Air Force, Navy and Marines plan to spend $33 billion to develop the jet and $162 billion to procure 2,457 F-35s, while foreign partners, also including Turkey, Norway, Australia, Denmark, and Canada — are expected to buy 700.

Hudson said he concurred with the GAO report, which also urged the Pentagon to carefully monitor subcontractor awards made to companies in the foreign partner countries, and to streamline the process of obtaining export authorizations.

He said the Pentagon had implemented measures to carefully monitor costs, and prevent major overruns seen in other weapons programs, like Lockheed’s F/A-22 fighter jet program.