13.1.17

Additional Delays and Cost Overruns for F-35, Trump Remains Skeptical

According to Senator John McCain, Chairman of the Senate Armed Services Committee, the Pentagon expects the F-35 program to be delayed by seven months and incur additional costs of at least $500 million. The delay will extend the system development and demonstration phase (SDD). This news follows a personal promise by the Lockheed-Martin CEO to President-elect Trump that the company would drive down costs. Trump mentioned the F-35 in his Wednesday news conference, saying “[The F-35] is way behind schedule and many billions of dollars over budget. I don't like that,” and “…we’re going to do some big things on the F-35 program and perhaps the F-18 program,” suggesting he may push for a competition between the two aircraft to determine which will receive more procurement dollars.

The Cipher Take: An additional delay is bad news for proponents of the program who, until now, could point to cost cutting measures and a return to a reasonable delivery timetable as evidence that history’s most expensive procurement program had turned itself around. While the unit cost is expected to drop from $130 million to $85 million by the end of 2019, this will provide little assurance to critics like Senator McCain or taxpayers who will eventually foot the $500 million or more to complete SDD. The seven-month delay is to complete the airplane’s Block 3F software upgrade, which will allow the plane to carry a more varied arsenal and improve maneuverability in flight—the aircraft is currently limited by its software as a safety precaution until testing is complete. As for Trump’s call for a competition between the F-35 and F-18, it is unclear how the two could be compared objectively. Though the F-18 is a capable aircraft that will serve an important role for the U.S. for many more years, it pales in comparison to the F-35’s stealth, networking and sensory capabilities. At this point in the life of the program, Trump and his Pentagon policymakers will have a difficult time balancing between affordability and accountability in the procurement process and delivering the most advanced aircraft to the armed services.

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