04/23/2012 01:54 pm ET Updated Jun 20, 2012

F-35 Update: Who's Keeping the Books?

Once again, Inside Defense and Defence iQ have reported on the latest doings involving the still-problematic F-35:

On the 16th, iQ reported that the British version of the F-35 Joint Strike Fighter had its inaugural flight during the previous week. It was the short take off/vertical landing (STOVL) version of the plane and last week's test was the first test of the international variant of the aircraft.

But, according to iQ, "Throughout the Easter recess, Prime Minister David Cameron, ha[d] been reviewing the F-35 program after concerns over spiraling costs...have forced Defense Secretary Philip Hammond to rethink which F-35 variant presents the best value for money for the government..." The Chair of the House of Commons Defense Select Committee "said that many would 'applaud' Hammond's decision to revert back to the F-35B variant, as it will save £2 billion." The London Times reported that "A revision to the F-35B is fully endorsed by the Chiefs of Staff, importantly including the Royal Navy and RAF."

Two weeks ago, the Pentagon reported that the costs of the F-35 JSF program had "increased 4.3% to $396 billion. As a result, Canada, among other nations, is thought to be seriously considering its options if costs continue to soar." Later, the Dutch Defense Minister announced that his "government will be acquiring less than the 85 F-35 fighters that it originally had agreed to."

On April 13th, according to the Inside Defense of April 17th, the Pentagon reported that it was going to buy two F-35 jets that had been cut out of the budget last fall because it had found extra money "during an end-of-fiscal-year-budget review." Last summer, Senator John McCain cut the two planes. In a July 12, 2011 Twitter post he called "the reprogramming request 'disgraceful'".

The very next day, April 18th, Inside Defense reporter Jason Sherman reveals that "The Joint Strike Fighter's fourth production run could be $534 million dollars higher than originally expected, a 12.5% increase propelled by an estimated $289 million dollars in additional costs to correct efficiencies uncovered during F-35 flight testing, according to the Pentagon".

The Inside Defense report continued that "In testimony prepared for Congress last month, Pentagon acquisition officials -- including acting acquisition chief, Frank Kendall, and Vice Adm. David Venlet, director of the F-35 program office -- disclosed less than half of the potential costs DOD expects will be required to procure the low-rate initial production (LRIP) Lot 4 aircraft... The government is responsible for all LRIP Lot 4 concurrency costs...The projected concurrency costs plus forecast cost overruns would total $534 million."

Again quoting Inside Defense, "Asked why Pentagon did not mention this figure to Congress last month, Pentagon spokeswoman Cheryl Irwin said, 'We don't have a budget quality estimate of concurrency costs for LRIP Lot 4. We have indicated to Congress there will be additional costs for concurrency.'" Kendall and Venlet in their previous testimony "acknowledged the F-35 program was established in 2001 with 'unfounded optimism about the time and cost required to concurrently develop and produce the new stealth fighter."

Inside Defense reported that when this issue was discussed last summer, "the Pentagon estimated $771 million in additional costs for the first three production runs, a tab that is being financed in part by cutting two aircraft from the fifth production run." I suggest that if you believe that that cut is likely to be made, you should look back to what happened to John McCain last July, and he's a US Senator.

As I count it, there's about a billion dollars of costs being discussed involving the F-35. It was Senator Everett Dirksen who said fifty years ago, "A billion here, a billion there, pretty soon, you're talking real money". To the Pentagon, a billion dollars seems a mere pittance.

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