US F-35 troubles

Things not exactly going to plan:

Gates Shakes Up Leadership for F-35

Defense Secretary Robert M. Gates said Monday that he was replacing the general in charge of the Pentagon’s largest weapons program — the F-35 Joint Strike Fighter — and withholding $614 million in award fees from the contractor, Lockheed Martin.

The surprise announcement came from a Pentagon chief who has sought to impose accountability across the department’s senior leadership and who himself had promoted plans for the new plane last year in persuading Congress to kill the more expensive F-22 fighter jet. But a special Pentagon review team has since warned of possibly billions of dollars in cost overruns on the plane, and Mr. Gates announced that he was restructuring the program and requiring the company to cover some of the extra costs.

Mr. Gates disclosed the reshuffling on the F-35 program as he released the Pentagon’s proposed $708.3 billion spending package for the fiscal year 2011...

Mr. Gates said the program manager on the F-35, Maj. Gen. David Heinz of the Marine Corps, would be replaced by a higher-ranking general whose name would be announced soon.

“A number of key goals and benchmarks were not met,” he said, adding that “the taxpayer should not have to bear the entire burden of getting the J.S.F. program back on track.”

In a statement issued late Monday, Lockheed Martin said it had been working with military officials “on a plan to get the program back on track” and was “committed to stabilizing F-35 cost, affordability and to fielding the aircraft on time.”

Mr. Gates said he planned to extend the development phase by a year. Pentagon officials said they would delay the purchase of 122 planes and expand the flight testing to try to avoid much of the $16 billion in cost overruns that the review team had projected.

The Air Force, the Navy and the Marines plan to buy 2,400 of the planes over the next 25 years, and eight allied nations have also invested in the project [Canadian angle here, note flags on this aircraft, link enlarges photo]

Tom Reynolds/Lockheed Martin
The F-35 is to be used by the Air Force, Navy and Marines...

More from Aviation Week & Space Technology, and lots of background from Defense Industry Daily.

Update: From AW&ST, Feb. 10:

...
Gates’s decision to stretch out testing of the Joint Strike Fighter by 13 months to November 2015, replace the government program manager and withhold $614 million of the award fee from the Lockheed Martin/Northrop Grumman/BAE Systems team is a signal of what is ahead for underperforming programs...

The F-35 decision was a turnabout for the Defense secretary, who was encouraged during a visit to Lockheed Martin’s Fort Worth production facility in August. “It [is] clear that there were more problems than we were aware of when I visited Fort Worth,” Gates told reporters last week. “The progress and performance of the F-35 over the past two years has not been what it should [have been], as a number of key goals and benchmarks were not met.” The new schedule reduces concurrency of development and flight-testing with production...

The request also scales back production quantities. As of early 2009, program officials expected 47 aircraft in low-rate initial production (LRIP) Lot 5 for Fiscal 2011. That was upped in November to 52 (based on the Fiscal 2010 budget), and now has been decreased to 43 aircraft. LRIP Lot 6 in Fiscal 2012 was planned early last year to include 114 aircraft, which was decreased to 62 in November. Now the request for Fiscal 2012 is 45 aircraft. International customers expect to buy eight aircraft in LRIP Lot 6.

Lockheed Martin officials say they are allowed a “buy-to-budget” strategy that would allow the purchase of extra aircraft if they come in under cost and there is leftover money. However, the likelihood that the program will ever revert to the previous ramp-up is slim.

This is expected to drive the per-unit cost of early aircraft up significantly. Maj. Gen. Alfred Flowers, Air Force budget director, says the cost of a single F-35 in LRIP Lot 5 (Fiscal 2011) is $141 million. Gates says he is “not sure” about the possibility of breaching cost rules in the Nunn-McCurdy statute, which was recently made more stringent. Such a breach would spark a full review of the program and require Gates to certify that it can move forward without additional overruns...