Lost amid reports of up to a 90% cost overrun for the F-35 programme is the curious fact that Lockheed Martin is so far delivering low-rate initial production aircraft under budget.
So, why is there a nearly 90%-and-widening cost estimate spread between the Department of Defense and Lockheed?
The reason is a new law that allows the DoD to set long-term budgets based on independent - and generally more conservative - cost assessments. So the F-35 cost overrun has been based on fresh assumptions, not on new facts.
© Lockheed Martin
Anticipating a massive cost overrun, the DoD has slashed up to 120 aircraft from the five-year production plan. Perception is creating its own reality, as production cutbacks are guaranteed to increase unit costs.
But Lockheed's optimism is also contradicted by its performance. Deliveries of developmental aircraft have come more than a year late. Flight tests are hundreds of sorties behind schedule. At some point, that has to catch up to Lockheed's cost accounting.
Underlying the DoD's conservative assumptions is another concern: Lockheed has to sell 2,443 jets to the USA and more than 700 to foreign partners for the sums to add up.
As perception and reality continue to mingle on this programme, that is a very optimistic assumption.