Lockheed rejects Pentagon's cost estimates for F-35

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Lockheed Martin has reached a key F-35 Joint Strike Fighter first flight milestone - and struck back at Department of Defense budget estimates warning that the much-delayed programme is heading for per-aircraft procurement costs of nearly double original estimates.

A year late, short take-off vertical landing test aircraft BF-4 made its first, 45min flight on 7 April. The flight was also the first for the F-35's full suite of advanced sensors.

But that milestone came against a background of Pentagon cost estimates released in February showing average F-35 procurement will grow by as much as 90%, and a US Navy study showing estimates for total ownership costs had tripled since contract award in 2001.

The disclosures triggered a mandatory review under the Nunn-McCurdy Law, which requires the DoD to restructure the programme or terminate the contract. Changes already announced include reducing the five-year production plan by as many as 120 aircraft, to 2,443.

 © Lockheed Martin

Lockheed has hit back at a DoD budgeting philosophy based on recent legislative changes that allow budgeters to use more conservative assumptions: "Lockheed Martin and its partners are confident that the actual aircraft costs negotiated with the government in the future will be substantially lower than [these] estimates".

Moreover, Lockheed notes that the first three lots of low-rate initial production (LRIP) have been signed within the DoD's 2007 budget projections. The fourth LRIP deal should continue that trend after it is signed in May, it says, adding: "While the government is adopting the independent estimates for budgeting, it is holding industry to much lower cost targets."

However, the company did not respond to a question asking it to reveal its own long-term cost projections for the F-35.

Although the LRIP contracts have been delivered within budget, the F-35 programme has faced previous cost overruns and costly schedule delays. A weight problem discovered in 2004 forced Lockheed to redesign the F-35B short take-off and vertical landing variant, which doubled the cost of the development phase and added two years.

Since then, the flight-test programme has also remained behind schedule, with only 3% of flight tests scheduled in fiscal year 2010 completed during the first five months. Lockheed also acknowledges that aircraft deliveries have been delayed by about six months.

The US government's newer, more conservative projections assume that the DoD will buy a total of 2,443 F-35s. If that number is reduced further, the projected average cost per aircraft will increase even more.