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JSF Buy Shrinks If Costs Grow

No one at the Pentagon has been willing to say the Joint Strike Fighter buy might get smaller until now. But Robert Hale, the comptroller and thus the main money man, made it explicit today. "If there is cost growth, I think we will just have to reduce the buy," he said at the annual Precision Strike Association conference.

Hale was responding to a reporter's question and did not raise the issue himself. He was asked if the F-35 cost growth was completely under control. He noted that the JET estimates are 50 percent reliable -- even odds that the price can go up or that they might go down. "I think I would not raise my right hand and swear," Hale said. But he also made clear the department has tried hard to ensure any more cost growth is less likely. "I don’t think you can be sure, but it is much more robustly funded than it was in the past," he said.

Cutting the buy in the face of greater costs would seem on the face of it to be a common-sense conclusion. But given the political sensitivity of the program, any hint that the program could either go up in price or get smaller in numbers is sure to attract criticism. As Hale points out so ably and so regularly, the country is in a tight economic spot and defense dollars are precious.

A congressional aide said Hale's comment "reflects what has taken place historically and is intuitive. If something costs 2x more than you had planned, normally you have to buy fewer. I would be very surprised if that does not happen. And it is going on with ships, ground combat vehicles, and most everything else. A major reckoning ahead.. The aide warned of rising unit costs. "You are looking at least $112 million JSFs, with estimates as high as $137 million – average unit procurement costs."

But Hale's mention of the JET's statistical reliability is also telling. When I asked Air Force Secretary Mike Donley about this at breakfast yesterday, he offered a pretty long answer that basically boiled down to: doing estimates is really hard and this is the best one we've got. He noted that estimates rely heavily on past experience. In the F-35's case, that means the F-16. But the problem with comparing the F-16 to the F-35 is that Lockheed Martin really is pursuing a new type of production. The plane will be the first one made with something close to the automobile assembly line approach, and it relies heavily on concurrency, testing as you build. The F-16 is a hand-built plane that used traditional fighter acquisition processes.

Let's hope the JET, given those differences, got it right.

Warning flag for tomorrow. Ash Carter, undersecretary of defense for acquisition, technology and logistics, and Bob Stevens, Lockheed's CEO, will speak about the JSF with reporters at 2:15 p.m. Carter and Lockheed officials will be meeting with top officials from the eight partner nations tomorrow and talking about the program restructure. This is a long-planned meeting but the rumor mill has at least one -- and maybe two -- senior F-35 executive getting the ax tomorrow.

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