THE BLOG
12/06/2013 05:05 pm ET Updated Feb 05, 2014

F-35 Contract May Be the Worst Deal the DOD Has Ever Made

In June of 2013, Time magazine reported that the DOD will have spent $87.5 billion on R&D, Procurement and Initial Spare Parts on the F-35. It also reported that "there is a discernible trend in F-35 fabrication costs: they're clearly increasing." It adds that "Future years may prove even more costly: more stringent testing is still in the future and will not finish until 2019 at the earliest."

Worse news has just arrived. The DOD hopes that it may "eventually select one or multiple product support integrators (PSIs), lead contractors to assist the program office in F-35 sustainment." There is at least one more, perhaps unforeseen, problem. According to InsideDefense in a great piece of investigative reporting "F-35 PEO Says Program Fighting For Data Rights To Enable Comparison", "The government would have to own or have access to a large amount of proprietary data Lockheed and Pratt [Lockheed produces the F-35 airplane; Pratt manufacturers the jet's engine] have developed for the F-35.

Lt. Gen. Christopher Bodgan said that "little attention was paid to the F-35 data rights ownership issues until about 18 months ago and it is a high priority issue today." The "Pentagon and its lawyers are working with the JSF [Joint Strike Fighter] program's main industry participants to sort out data rights ownership questions, many of which remain unresolved."

Bodgan added "We have been working with the current contractors and we have been working with, unfortunately, lawyers who get involved in this too, and we're going to try to stake out what the government really has and what the government really doesn't have. That is not an easy question to answer."

This seems to indicate that the government will have paid Pratt and Lockheed almost $88 billion without acquiring the "proprietary data" that Pratt and Lockheed claim to own. This is not the fault of Secretary of Defense Hagel, the contracts were signed long before he was appointed. Now he's left with at best an ugly lawsuit or at worst an expensive settlement with two contractors to whom he's already paid $87.5 billion. Any CEO responsible for a deal like this would've been fired long ago, but the previous DOD Secretaries are gone and we're still stuck with the bill.

The villains escape and tax payers pay.