04/09/2012 03:16 pm ET Updated Jun 09, 2012

The F-35 vs. Healthcare

Once again, Inside Defense reports that the F-35 Joint Strike Fighter (JSF) is undergoing keen scrutiny from both Congress and prospective international purchasers. Last Friday, Inside Defense reported that, "After years of largely negative reviews of the progress of the JSF program, Michael Sullivan, director of acquisition and sourcing management for the Government Accountability Office [GAO], told Congress recently that the program had seen some improvement lately, although he cautioned that major challenges remained for the program."

Inside Defense went on to report that a GAO report stated that "The program was 'making progress in flight testing,' but much of the negative tone from prior reports remained the same: critical technologies are not mature, there is a 'significant' risk of future design changes and the program 'lacks key knowledge about its technologies and manufacturing progress.'"

There are three versions of the F-35 in production--one for the Navy, a Marine Corps short take-off variant and the Air Force version. The first two variants are in a critical period. Last Friday, Inside Defense revealed that the DOD had "formally reset the Joint Strike Fighters programs acquisition baseline...establishing new 'affordability' targets that must be hit by 2019...targets that set hourly flight costs of at least $35,200." That cost, according to Inside Defense, "is 55 percent higher than the program's 2002 goal."

Inside Defense adds that the DOD "memo also sets new Unit Recurring Flyaway "affordability" cost targets, in FY-12 [Financial year 2012] dollars: $71.5 million for the Air Force variant; $92.7 million for the Marine Corps variant; and $80 million for the Navy's aircraft-carrier."

Vice Admiral David Venlet, the JSF program executive officer, on January 20th assured the House Armed Services subcommittee that the F-35 "has scheduled and budget realism now going forward." According to Inside Defense, Venlet said of the new budget "It is transparent in the discovery and correction of issues arising in tests that typical in all fighter development...The service systems are closely involved and contributing to the correction of issues in view now and that will arise in remaining test."

Despite all of the above, the JFS program is still in trouble with some of its international partner nations. Inside Defense reported that Italy has cut its order and "doubts remain about the affordability of the aircraft for some [other] countries." Richard Aboulafia, an aviation analyst, told Inside Defense, "I think the real challenge is just coming up with a price that's acceptable to people. It's obvious that [low-rate initial production] levels are going to stay at about 30 [planes] per year for some time....It's just too high a price for an export fight right now....You've got Japan, you've got Israel--you might not get anybody else."

The program's biggest obstacle seems to be the enormous amount of software code that needs to be written and verified. Aboulafia said that "always is [a stumbling block] in the modern aircraft." The GAO reported that "Significant development risks remain as the program integrates and tests these technologies".

The F-35 program suffered another blow yesterday when the Canadian Press reported that the Canadian "government froze spending Tuesday on the multi-billion dollar plan to buy new jet fighters after the [Canadian] auditor general produced a withering report accusing the Department of National Defence of keeping Parliament in the dark about spiraling problems with the F-35 purchase." The planes were scheduled to cost Canada $9 billion for 65 new F-35s. Canada's auditor general, Michael Ferguson, said the costs "will almost certainly be far higher than originally budgeted," but the "criticism does not mean the government will scrap the F-35 purchase..."

Senator John McCain has claimed that the F-35 program has already cost about $400 billion dollars, and may well rise to a $1 trillion. That seems unlikely, but if it does, it would amount to more than 5% of the national debt. Perhaps Paul Ryan should take a look at the F-35 before he cuts healthcare and Medicare entitlements.