New jet called 45% over budget

The Baltimore Sun

WASHINGTON -- Lockheed Martin Corp.'s Joint Strike Fighter, already the most expensive weapons program ever, is projected to increase in price by as much as $38 billion, congressional auditors said yesterday.

That would bring the cost to develop and build 2,458 U.S. aircraft to $337 billion, 45 percent above the estimate when the program started in October 2001.

"Midway through development, the program is over cost and behind schedule," Michael J. Sullivan, who tracks the program for the Government Accountability Office, told two panels of the House Armed Services Committee that oversee military spending.

The 12-year development period is entering its most challenging phase. This includes starting test flights, proving millions of lines of software code, finishing design of the three different models and refining manufacturing processes at Lockheed Martin and its subcontractors.

Sullivan said the Pentagon has identified billions of dollars in unfunded requirements, continued delays and "substantial" production inefficiency by Lockheed and engine maker Pratt & Whitney that will increase costs.

At $337 billion, the Joint Strike Fighter would be more than twice the price of the Pentagon's second most expensive weapons program, the $160 billion Future Combat System, the Army's modernization program.

The Joint Strike Fighter projected cost has been revised before. Sullivan told lawmakers that three new independent assessments, including one by the Pentagon's Cost Analysis Improvement Group, found the current estimate of $299 billion "is not comprehensive, is not accurate, is not well documented and is not credible."

Both Lockheed Martin, the world's largest defense company, and the Defense Department's program office are preparing a new estimate which is "expected to be much larger than what is now budgeted," said Sullivan, GAO's director of acquisition and sourcing management.

The Joint Strike Fighter is designed to be almost invisible to radar and capable of supporting ground troops. The production phase calls for at least 2,458 fighters for the Air Force, Navy and Marine Corps.

John J. Young Jr., the Pentagon's undersecretary for acquisition who testified with Sullivan, disagreed with the GAO assessment. He said the Pentagon would require a "modest" amount of extra money for the development phase that's now projected to cost $44.2 billion.

"I don't agree with those numbers," Young said in an interview after the hearing, referring to the GAO. "We have some cost issues" that are caused by Lockheed Martin missing schedules for blueprints and aircraft, he said.

John Smith, a spokesman for Bethesda-based Lockheed Martin, said in an e-mail that the company was unaware of the GAO estimates.

"We do not know the basis for the GAO estimates and until we receive and analyze their data we will be unable to comment on them," he said.

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