Advanced technology platforms are always difficult to design, plan, construct and support. This is one Senate Hearing that had good and bad news in it. The good news was the testimony of the current senior commanders of NORTHCOM and SOUTHCOM in part one of the Senate Armed Forces hearing with respects to Haiti relief and assistance, new mission to earthquake victims in Chile (SOUTHCOM), and the continued joint operations success of NORAD and supporting security operations of the coast of Vancouver, B.C. during the Winter 2010 Olympic games (NORTHCOM). The first segment lasted little more than an hour.
The bad news hit the table after the break. The Chairman of Senate Armed Forces committee got a closed door briefing prior to this open hearing on March 11th. Here are the highlights for the Joint Strike Fighter program, the JSF F-35 (Lightning II). Covering a Senate hearing is a difficult task to cover with any accuracy. In order to do so with any capability of allowing the reader to understand how it unfolded, a bullet form of the dialogue and highlights is used. Please write in talkback if you believe this is beneficial or not.
- The total cost of the program is now pegged at $300 billion.
- Senator McCain stated that latest figures estimate that the cost per aircraft is 50% higher than projected in 2001.
- Under Secretary of Defense: Compress program schedule management, contractors can do 'better'
- Time table delay estimate by Secretary is approximately 2 years based on new 'estimates'
- Cost overrun estimate vary based on production volumes during
- In 2002 the estimate was $50 million per aircraft: today it's $95 million (2002) per aircraft based on a total production run of 2443 fighters.
- Major restricting of the program is underway.
- Secretary Gates fired program procurement manager in February - US Marine Corp Maj. General David Heinz
- A. Sec. Carter - the financial submission to the committee are STILL estimates
- First test Air Force squadron plan - 2013 / Navy - Marine Corp VSTOL testing - 2012
- Testing program completion target: 2015
- Air Force Squadron (operational) Training 2016
- Flight testing will uncover unknown problems and thus unknown costs
- Transition to fixed aircraft pricing must be part of LV5 production.
- GAO still has significant concerns that future cost overruns will remain high.
- GAO believes flight testing will reveal requirement for more design (cost) changes
- Ms Fox made the mistake of comparing the F-22 and C-17 which both had cost overruns and brought under control and are successful aircraft in operation. Ms.Fox however also noted that both platforms also had cut back production runs. Senator McCain then fired back suggesting that if the JSF-35 program reduces its production run the cost per aircraft will skyrocket.
- Fiscal 2011procurement request is for additional funding for ONE JSF-35 aircraft is 210 million dollars
- Since 2002, manufacturer / contractor vendors are on contract agreement is on a cost - plus pricing schedule, which explains why the contractors have floated for so long without any penalties and the firing of the program manager Maj. General Heinz.
- Senator Carl Levin asked what caused the cost overruns. Carter responds: During development phase, change management of the design created significant delays and thus added costs by holding up all vendors.
- From '07 fiscal year, the cost went from 70 Million per aircraft to the present 95 million cost (2002 dollars), attributed mainly to the STOVL version.
- Senator Levin is demanding answer to basic question: did prime contractor simply bid low and bill later.
- A. Sec. Carter Weapons Systems Acquisition Reform Act will be used for all production contracts in 2010 and onwards.
- From 2002 to 2016, the total cost (to date) will have been $50 billion - but does not include production after training squadrons are commissioned in 2016. Program was initiated in 1995.
- $1.3 billion have already been spent in alternative engine testing and planning. If an alternative engine program is to continue, it would cost an additional $2.9 billion.
- A. Sec Carter highlights the generation gap between acquisition (qualified) experience of old and new civilian personnel at the Pentagon and vendors. Relationships taken for granted.
- Mr. Sullivan of the GAO states that experience played a role in cost estimate planning inside DoD
- Mr. Sullivan of the GAO estimates that in today's cost - per aircraft is $112 million
- To reduce costs, the test plan has to be reduced from 30 months to 18 months.
- Mr. Sullivan believes that the testing plan is unrealistic due to the amount of software used in this aircraft.
- In comparison, the F-22 wound up costing taxpayers $140 million per aircraft based on the total development and capped production run.
- Senator McCaskill has answers - go to multi-year deal - fixes the cost model problem.
- Senator McCaskill wants to know who is responsible for cost overruns. Wants to hold identifiable individuals on 'whose fault it is'
- A. Sec. Carter only identified that Maj. Gen. Heinz was removed from the program's procurement office.
- A. Sec. Carter reflects that current projections are that the program will run 38% over original estimates.
It should be noted that this project was a major undertaking demanding use of advance materials, technology and weapons payloads. Aircraft technical delays and cost over runs are not unheard of in complex aircraft programs. It consisted of the following demands the military wanted;
- Joint Fighter role capability for all armed forces services requirements
- Attack and bomber role (F-35A)
- STOVL capability - Short Take Off Vertical Landing for forward naval (F-35C) and air base use (F-35B)
- Two engine manufacturer capability - GE / Rolls Royce (F136) and Pratt & Whitney (F135). Currently Pratt & Whitney is the prime contractor after development costs skyrocketed and was halted in 2007. The cost analysis found after testing the two engines manufactures in tandem was problematic. The F136 engine program remains problematic. The STOVL capability of both engine manufactures is the Rolls Royce LiftSystem.
- Stealth design using advanced technology and materials involves expensive production techniques when compared to traditional fighter aircraft manufacturing materials and techniques such as those used in F-14, 15 and 16 aircraft.
- F-22 (Raptor) Advanced Tactical Fighter (ATF) program was capped at 187 aircraft due to high cost overruns and technical production challenges.
- Advanced Software Package for weapon and pilot tasks
- Accounting systems and cost projections for this project were flawed since its inception and is a historical problem in global military procurement programs.
- Engineers operated development programs that underestimated the design tasks required when changes asked by the military were requested, increasing costs that nobody took to task.
The prime contractors for the program are Lockheed-Martin, Northrop Grumman, and BAE Systems - and the F135 engine prime, Pratt & Whitney and Rolls Royce with the F136 engine. The secondary advanced funding partners in the program are the United Kingdom, Italy, the Netherlands, Canada, Turkey, Australia, Norway and Denmark which agreed to contribute 4.375 billion in 2002. The U.S. military procurement plan was for 2,443 aircraft for the U.S. Navy, Air Force and Marine Corp. Another 750 aircraft were for export partners Canada, the United Kingdom, Australia, and other NATO nations. This is one of the biggest gambles in air force military history in that it has gambled that this is the only fighter aircraft it will need for several generations that will be used in NATO nations except the U.K. Sweden and France where indigenous fighter aircraft production still exists with the SAAB Gripen, EADS Typhoon and the French Dassault Rafale. It should be noted that all three of these manufactures also experienced cost overruns in their next generation fighter aircraft.
Military analysts are conflicted in the multi-role value of the aircraft in the future and post-mortem analysis of the reasons why. Nonetheless one of the biggest reasons why the costs blew up was creating a single platform for two difficult tasks; advanced tactical high speed attack and short take-off and landing capability with multi-mission payload capability. In order to accomplish those tasks, the competition process should have been extended prior to contract award to determine if the military should have proceeded with that set of design parameters or change the scope of the projects objectives i.e. create two different aircraft instead of one.
One of the reasons the VTOL capability was changed to STOVL aircraft was because a primary objective was to enable the military capability of landing the aircraft into forward operating areas that traditionally not possible such as large destroyers instead of being relegate to only expensive nuclear powered aircraft carriers. This was changed to short take off (less than 450 ft) with full payload and eliminated several tactical advantages of the original design. When this change occurred, the project likely should have been stopped and reviewed. By this time, the primary contractor was determined, Lockheed Martin. Both Lockheed and Boeing demonstrated VTOL versions during the initial competition in 2006. Clearly something went wrong that is not fully known other than the fact that costs continued to rise. It's been long rumored the biggest reason the change from VTOL to STOVL was weight. The Lockheed JSF-35 has been reported to be approximately 7 percent over the originally specified weight.
The aircraft carrier version will be catapult assisted variant as all navy aircraft are today. It is likely that one of the reasons the costs has risen, is this design was likely changed several times on naval versions going back and forth between catapult and non-catapult variants. Elimination of the VTOL (Vertical Take-Off Landing) version will hurt export variants, that could have been sold to NATO nations equipped with large destroyers that have helicopter hangers either converted or planned for in new ships. Every NATO nation has such destroyers in operation including Spain, Canada, U.K. Australia and the New Zealand. The only customers for the new STOVL version (J-35B) would be the Royal Navy and U.S. Marine Corp squadron units. The export version would likely be the JSF-35A. Canada's current F-18's are the same versions as early U.S. Navy versions. If that's any historical pattern, Canada could be a customer of the Naval (J-35C) variant if it wanted to be compatible with the British and American Navy air units. No decision has been made in Canada with respects to its plans for J-35 variant procurement. Canada's F-18's are now reaching 20-plus years in age and may simply purchase F-18 E/F Super Hornets instead and scrap its investment which was originally $1 billion, the 3rd largest original investor after the U.K.
It should be clearly noted, that none of these costs include weapons platforms such as bombs and missile system munitions or assets. Avionics are included in the price which integrates into the software operating system. Nor does it include cost of spare parts, maintenance, software upgrades and on-going upgrades the platform will go through after the aircraft is in service between 2016 and 2025.
The days of cost plus agreements between defense contractors and the government are over after this disaster. But it should be not surprise that every Senator wants the aircraft built because every Senate committee member has JSF-35 contractors or bases involved in the program. Senators will dutifully scream about the disaster, but will still be smiling at the end of the day, assuming that any of them are still in office when production really begins in 2016.
The committee was chaired by Senator Carl Levin
Senate Video - Armed Forces Commitee (JSF part of the session starts at the 144 Minute mark)
Written Testimony of General Victor E. Renuart, Jr., USAF Commander, U.S. Northern Command/ Commander, North American Aerospace Defense Command
Written Testimony of General Douglas M. Fraser, USAF Commander, U.S. Southern Command
Prepared Statement of Honorable Ashton B. Carter Under Secretary of Defense for Acquisition, Technology, and Logistics
Honorable Christine H. Fox Director of Cost Assessment and Program Evaluation Department of Defense
Prepared Statement of Major General Clyde D. Moore II, USAF Acting Program Executive Officer for the Joint Strike Fighter Program Department of Defense
Prepared Statement of Mr. Michael Sullivan Director of the Acquisition and Sourcing Management Team Government Accountability Office
Update March 12th, 2010: Under-Secretary Ashton Carter Pentagon Briefing after Hearing covered C-SPAN
Disclosure: Since 2006, I have been involved with communications studies for both SOUTHCOM and NORTHCOM. None are related to military acquisition or the JSF program. Consulting involved civilian - military interoperability telecommunications research.