Mattis Orders Separate Reviews of F-35, Air Force One Programs

Defense Secretary James Mattis has ordered separate reviews of the Pentagon's F-35 Joint Strike Fighter and Air Force One programs with an eye toward reducing program costs, an official announced Friday.

In two memorandums signed and effective immediately, Mattis said Deputy Defense Secretary Robert Work will "oversee a review that compares the F-35C and F/A-18E/F operational capabilities and assess the extent that the F/A-18E/F [Super Hornet] improvements can be made in order to provide a competitive, cost effective fighter aircraft alternative," according to a statement from Pentagon spokesman Navy Capt. Jeff Davis.

For the Presidential Aircraft Recapitalization program, known as Air Force One, Mattis said Work's review should "identify specific areas where costs can be lowered," such as "autonomous operations, aircraft power generation, environmental conditioning [cooling], survivability, and military [and] civilian communication capabilities," the memo said.

The memos didn't specify if the review will reduce the planned number of aircraft.

Davis said of the effort, "This is a prudent step to incorporate additional information into the budget preparation process and to inform the secretary's recommendations to the president regarding critical military capabilities."

He added, "This action is also consistent with the president's guidance to provide the strongest and most efficient military possible for our nation's defense, and it aligns with the secretary's priority to increase military readiness while gaining full value from every taxpayer dollar spent on defense."

The total C requirement is a 260-unit buy for the Navy, Lockheed spokesman Michael J. Rein told Military.com There have been 26 carrier variants delivered to the Navy as of December 2016, he said.

Both the F-35 stealth fighter and Air Force One presidential aircraft acquisition programs have been in President Donald Trump's crosshairs in recent weeks.

Trump has criticized the high cost of the $4 billion Air Force One being developed by Boeing and the nearly $400 billion F-35 Joint Strike Fighter being manufactured by Lockheed Martin Corp.

On Dec. 6, Trump tweeted "cancel order!" in reference to the Air Force One program. He brought up the issue again during a Dec. 16 speech in Pennsylvania, and also called the F-35 program a "disaster" with its cost overruns.

"You're way early in the Air Force One program to be doing that kind of review, and frankly, there's not a lot to review," Richard Aboulafia, vice president and analyst at the Teal Group, told Military.com. "The program [right now] is a review. What do we need to recapitalize?"

Trump later tweeted on Dec. 22, "Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!"

However, for the F-35, "the C model is kind of an irrelevance to the broader program context," Aboulafia said. "Even if they cancel the last [few] aircraft, I can't imagine it would make a big difference," he said.

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"Now that we know [he meant] just the C [version] … that's been reality for years now. The Navy hasn't bought more than a tiny token … of Cs, and four times as many Super Hornets and Growlers. You do the math … It's a single digit percentage of the total program at best," Aboulafia said.

Lockheed’s production run of the F-35C is slated through 2036, Rein said, but the planes will likely be delivered at a much faster rate.

"Even in that context, all those planes would have come much later when they matter less when the program's secure, costs reduced, and whatever else," Aboulafia said.

The F-35 Joint Strike Fighter is expected to cost nearly $400 billion in development and procurement costs to field a fleet of 2,457 single-engine fighters -- and some $1.5 trillion in lifetime sustainment costs, according to Pentagon figures. It's the Pentagon's single most expensive acquisition effort.

Capital Alpha Partners LLC, an independent financial policy research firm in Washington, D.C., on Friday responded, "Bottom line for us is that we don't expect this to result in major programmatic changes."

It added in a statement, "DoD with the backing of Trump could simply push for a lower unit price in future production lots resulting in the primes on the program eating this or more likely pushing harder on subcontractors for lower costs.

"If Lockheed Martin lost the F-35C, the overall price on the F-35 might increase on lower total production, but international demand and DoD requirements should still keep the program ramping up to [around] 130 annual deliveries by the early 2020s -- down from [around] 150 or so," the firm said.

Trump has met with Lockheed Martin Corp.'s CEO Marillyn Hewson on multiple occasions and last week with Boeing's CEO Dennis Muilenburg.

The company heads have vowed -- in what they said were productive conversations with the president -- to drive down costs on both programs.

"We made some great progress on simplifying requirements for Air Force One, streamlining the process, streamlining certification by using commercial practices," Muilenburg said just days after Trump met with Hewson.

"All of that is going to provide a better airplane at a lower cost, so I'm pleased with the progress there," he said. "And similarly on fighters, we were able to talk about options for the country and capabilities that will, again, provide the best capability for our warfighters most affordably."