Gates Calls for Delay in Pentagon Purchases of Lockheed F-35s

Tony Capaccio. Business Week, 07 January 2010.
http://www.businessweek.com/news/2010-01-07/gates-calls-for-delay-in-pentagon-purchases-of-lockheed-f-35s.html

Excerpt:

One recent study agreed with a similar one from a year earlier that predicted a 2 1/2 year delay in development beyond the current target of October 2014 and an added cost of $16.5 billion. The new estimate recommended the Pentagon add $314 million to the five-year plan to beef up testing. Gates did so.

Editor’s Comment:

With Afghan war costs rising and political pressure to reign in the federal deficit mounting Gates needs to reduce the year to year Pentagon procurement budget for big ticket items. Postponing and stringing out the acquisition of major platform buys (such as a new fighter aircraft like the F-35) is one way to get some of those savings without having to take on the much harder political task of canceling programs or cutting structure. Unfortunately such an approach usually makes an acquisition program more costly when production efficiencies of scale are lost as fewer units are manufactured each year over a longer period.

This article says, “More than $2.8 billion that was budgeted earlier to buy the military’s next-generation fighter would instead be used to continue its development.” So it may seem that this decision simply shifts spending from production to development accounts with neutral effect on the Pentagon topline. However the article doesn’t adequately address whether Gates may have been facing increased development costs overlapping ambitious production schedules which would have cost much more in the next five years than had been previously planned. This decision delays the onset of large production costs to the years after 2014.

The Navy has indicated it will need to buy more F/A-18s if the F-35 doesn’t appear when it had previously been promised. But the Navy’s requirement assumes there are no carrier cuts (and associated Naval combat wing cuts) in this period. If there are, it will make those F/A-18s redundant.

And what if five years from now drones are proving themselves to be the combat craft of the future at the very time the F-35 is meant to start appearing in operational units in significant numbers? Maybe then the buy of the next generation manned fighter plane can be in the range of 1200 units instead of the 2400 units in the current plan. Then we could realize real savings in this acquisition program. (for some options on future fighter buys and program savings see: David Axe, “Congressional Budget Office’s Plans to Save the Air Force”, War is Boring, 18 May 2009.)

If five years from now drones play a more central role in air combat power and there are fewer carriers in the fleet the decision to slow the F-35 acquisition program down will prove to be a very practical one.

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