25 Apr 2017

U.S. Congress Warns Against Letting DoD spend more on F-35 development

As the Canadian government continues to wrestle with how to proceed with the acquisition of new fighters to replace its fleet of Boeing CF-18 Hornets, the U.S. Government Accountability Office has sounded another warning about the Lockheed Martin F-35 Lightning II, which might yet be a candidate for the Canadian program.

In an April 24 report to Congressional committees reviewing the program, the GAO said that the Department of Defense (DOD) should not commit any more money to developing “future capabilities” of the F-35 before resolving issues with the baseline Joint Strike fighter (JSF).

With projected lifetime costs of more than $1 trillion, the F-35 is the most costly and ambitious acquisition in DOD history. The program has been restructured three times between 2003 and 2012, with the DOD continually increasing cost estimates and extending deadlines.

The former Conservative government in Ottawa preferred the F-35 as a replacement for the Hornets but the current Liberal administration favours “an open and transparent competition” among what it describes as “many lower-priced options that better match Canada’s defence needs.” Although the government has not publicly specified what those needs are, it says the “primary mission of our fighter aircraft should remain the defence of North America, not stealth first-strike capability.”

On the other hand, the Liberals have not unequivocally ruled out the possibility of letting Lockheed Martin compete, and Canada plans to remain in the JSF consortium with a US$30.6 million membership payment due in May. It has been a consortium member since 1997.

In its report to Congress, the GAO pointed out that it has “for years […] reported on the F-35 program's cost and schedule overruns, knowledge gaps, and performance issues.” While the DOD had taken “a number of steps to address these issues, the department continues to struggle to keep the development costs for the baseline aircraft in check.”

Noting that the program is approaching the end of development, and as Lockheed Martin begins increasing production “significantly” over the next few years, peaking in 2022, the DOD would need to top up its procurement budget by an annual average of $12 billion through 2038 to acquire 2,457 aircraft. Meanwhile, it will be funding two other major acquisitions, the Northrop Grumman B-21 Raider bomber and the Boeing KC-46A Pegasus tanker.

“Because of problems with the mission systems software, known as Block 3F, program officials optimistically estimate that the program will need an additional five months to complete developmental testing,” the GAO said. But its own analysis points to another year of development testing and more than $1.7 billion in additional funding, triple the DOD forecast. “These delays could affect the start of the F-35’s initial operational test and evaluation, postpone the Navy’s initial operational capability, and delay the program’s full rate production decision, currently planned for April 2019.”

Moreover, program officials say they will need more money in the 2018 fiscal year: some $600 million for follow-on modernization (Block 4) and then more than $650 million for bulk buying of some elements. But the GAO said that the DoD can’t make a sound business case for Block 4 funding until Block 3F testing of the baseline aircraft’s mission systems software is complete, that details on the bulk buying options were “unclear”, and that negotiations with contractors are ongoing.

– Ken Pole