?>

Some Rough Sledding Ahead for JSF Program (Updated 17 September)

by: Matthew Potter
September 17, 2010

Category: Business Line, Canada, Companies, Congress, Contract Awards, Countries, Department of Defense, development program, Events, Federal Budget Process, GE, Holland, Lockheed Martin, logistics, Military Aviation, Pratt & Whitney, production program, Proposal, Restructuring, Rolls-Royce, Services, U.S. Air Force, U.S. Marine Corps, U.S. Navy, UTC | RSS 2.0

UPDATE – The Senate Appropriations Committee (SAC) used their move to cut production by ten aircraft as a way to criticize the whole JSF program overall. They said that the cut was the second option they considered with the first being elimination of all funding in 2011 for the program. The committee while it did not fund the second engine for the aircraft supported it in their language. The House has funded this as they did last year and the money will have to be decided upon in Committee.

The F-35 Joint Strike Fighter (JSF) has become the major acquisition program underway by the United States. Lockeed Martin’s (LMT) team of contractors along with the joint Air Force and Navy program office is building an advanced aircraft that will be used by the U.S. and many allies to replace the F-16, F/A-18 and AV-8 and Harrier vertical take off aircraft. In order to do this three separate versions will be developed.

Over the last few years the program has suffered schedule problems which have led to cost growth. This has reached a point where the Pentagon under Robert Gates has put a great deal of pressure on Lockheed to control costs. The increases in price have caused some countries like Canada and The Netherlands to rethink their commitment to the program.

In the United States the Congress has also weighed in on the program. The Senate Appropriation Committee marked up the 2011 budget and reduced the planned buy of aircraft from 42 to 32 for next year. They are arguing that Lockheed has not even begun building the aircraft ordered with last buy and that it seems sensible to reduce risk by cutting back.

At the same time the House continues to fund the alternate engine in development for the aircraft. This program has been funded by Congress for several years despite the Air Force’s and Defense Department’s wishes as a potential risk reduction for the system. It also keeps General Electric (GE) and Rolls-Royce (RR:LSE) involved in the program as the primary engine is made by Pratt & Whitney, part of United Technologies (UTC). Gates and the Obama Administration have threatened to veto the budget if the money was kept although they relented in 2010 as the funding did not come out of the core program budget.

Finally the negotiations for the current production buy have taken longer then planned as Lockheed and the Air Force struggle to find a way to reach the cost goals for the program. Part of the problem is that the Pentagon wants to move to a fixed price contract with fee tied to specific events. Most development contracts which this still really is are cost plus some fee based on schedule. The change caused Lockheed to have to submit a new proposal and contract structure which is taking time for the government to review and accept.

Delays in awarding the next phase of the program may only cause further problems down the line. Schedule slip and decreases in quantities will only cause more cost in the years ahead. This may force Allies to wait longer then they have planned as well as the U.S. military to keep older aircraft in service longer. This then leads to higher maintenance costs putting pressure on the overall budget as a whole.

The JSF has had its struggles these last three years and it looks like they will continue in the near term. The program though is necessary and still requires a commitment from the U.S. and the other customers as their options are limited without a decision to accept other aircraft currently in production.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Tags: , , , , , , , , ,


| Give a Comment | trackback

No Comments

Leave a Reply

You must be logged in to post a comment.

    Like Us On Facebook

  • Search This Site

    Custom Search
  • Upcoming Events

  • FREE Business Downloads

  • Widget Area

    This is widget area, add your widget here from your widget on appereance on your admin panel

>