Senate panel blasts Pentagon, Lockheed Martin over F-35

McClatchy NewspapersMay 19, 2011 

WASHINGTON — The Pentagon's signature aircraft for all military services, the F-35 Joint Strike Fighter, came under blistering criticism Thursday at a Senate hearing for cost overruns that have nearly doubled the cost of each plane, ongoing technical problems and schedule delays that have kept contractor Lockheed Martin from increasing production.

With words such as "jaw-dropping" on the cost estimates to produce and operate the fighter, several members of the Senate Armed Services Committee even challenged Defense Department officials on the once-unthinkable: looking at alternatives to the F-35, arguably the most technologically ambitious aircraft ever built.

"The fact is that, after almost 10 years in development and four years in production, according to outside experts, the aircraft's design is still not stable, manufacturing processes still need to improve and the overall weapon system has not yet been proven to be reliable," said Sen. John McCain of Arizona, the panel's top Republican. "Notably, it has taken Lockheed about 15 years and cost the taxpayer $56 billion to produce and deliver nine of 12 test aircraft. Over that period, Congress has authorized and appropriated funds for 113 F-35 jets. Lockheed has, however, delivered just 11."

The top Pentagon official at the hearing, Ashton Carter, the undersecretary of defense for acquisition, technology and logistics, said that a number of steps had been taken to restructure the program, including "decoupling" the Marine version, known as STOVL, for Short Take-Off and Vertical Landing, from the Air Force and Navy versions. Defense Secretary Robert Gates has placed the more complex Marine model on probation for two years.

Addressing the F-35's exploding cost estimates, Carter said, "The cost has doubled in real terms, and that's unacceptable."

The costs to operate the aircraft once they're built also are projected to increase, so much so that Carter said he'd told the F-35's nine international partners, who met last month in Fort Worth, Texas, that "it is way too high."

As for alternatives, and reports that some international partners were turning to Boeing for F/A-18s, Carter said, "There aren't. We want it. At the same time, it has to be affordable. At the moment, in its projections, it's not."

Committee Chairman Carl Levin, D-Mich., asked how Lockheed Martin was sharing in reducing the cost increases. Carter said that new fixed-fee contracts provided for an "award fee" to reward performance but that the company had met very few of the targets.

McCain sharply questioned the cost figures and said, "Some of us saw this train wreck coming."

"We have to start considering alternatives," he said, adding that Lockheed Martin "had done an abysmal job."

Sen. Scott Brown, R-Mass., echoed McCain's concerns.

"At what point do we cut the cord and go in a different direction?" Brown asked. "Or can we?"

Sen. John Cornyn, R-Texas, noted the tough budget climate and said that "taxpayers ought to get their money's worth and not pay one cent more."

Senators from both parties pressed the witnesses for alternatives, with freshman Sen. Richard Blumenthal, D-Conn., calling the question of alternatives "the elephant in the room."

Lockheed Martin Executive Vice President Charles "Tom" Burbage, when asked about the program's cost overruns, said, "The process in this project is complex and challenging, with annual budgets and annual schedules,"

That prompted McCain to raise his voice and ask, "Annual budgets? You've increased annual budgets by almost double."

McCain then asked about Lockheed Martin's profits for last year. "There's been a handsome return to shareholders, but not to taxpayers," he said.

Lockheed Martin Corp., based in the Washington suburb of Bethesda, Md., reported a 19 percent increase in profits in the fourth quarter of 2010 on earnings of $983 million, or $2.73 per share.

However, the company reported lower earnings for the year, with profit dropping about 3.2 percent to $2.93 billion, down from $3.02 billion in 2009.

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McClatchy Newspapers 2011

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