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GAO’s F-35 Estimate Plunges $11.5 Billion; EELV Costs Soar $28.1 Billion

Posted by Colin Clark on

AF-1 and AF-2 Arrival at Edwards Air Force Base

WASHINGTON: The most expensive conventional weapons program in history just scored a major win, with the F-35 program’s estimated acquisition costs plunging $11.5 billion. This is no program estimate that critics might savage. This comes from the Government Accountability Office’s definitive annual Assessment of Selected Weapons Report.

The GAO did not mince words in identifying the biggest winner in its analysis of the Pentagon’s major weapons programs:

The most significant of these decreases is the $11.5 billion reduction to the F-35 Joint Strike Fighter program’s estimate, due solely to efficiencies found within the program as no decrease in quantities was reported.

While the F-35 came down, the Evolved Expendable Launch Vehicle blew up, with those costs rising $28.1 billion, or a very impressive 78 percent

Lockheed Martin’s management of the F-35 came in for a mix of praise and criticism from GAO, especially on production.

“The contractor uses statistical process controls as one means to assess critical manufacturing processes. Twenty five percent of those processes are currently judged capable of consistently producing quality parts at the best practice standards,” the report says. “Production efforts have improved as the production line continues to show efficiencies and quality metrics show positive trends. However, in 2013, problems with engine hoses, engine turbines, and specialty metals halted production deliveries for three months. In 2013, 35 planes were delivered to the government—eight less than originally planned. Aircraft deliveries were postponed for one month while the runway at the final assembly facility was resurfaced.”

Overall, the GAO gave the US military some credit for improving its management of taxpayer dollars. While the overall size of the Pentagon’s acquisition portfolio rose, GAO says that was due to a “few” programs.

“The estimated cost of DOD’s 2013 portfolio of 80 weapon programs is $14.1 billion more than the 2012 portfolio of 85 programs. The 80 programs within this year’s portfolio have had estimated cost increases of $12.6 billion against their estimates from a year ago and an average of 2 months increase in schedule,” GAO says. “This increase masks otherwise positive trends as 50 of 80 programs in the portfolio decreased their total acquisition costs and the majority of the cost increases can be traced to either the effects of additional procurement quantities or inefficiencies experienced in a few programs.”

If you look at the EELV increase, that eats up an awful lost of the increase and GAO puts it simply:

“While the overall cost of the 2013 portfolio has increased, 50 of the 80 programs within the portfolio reduced their costs over the past year. The majority of the net cost growth can be attributed to a single program, the Evolved Expendable Launch Vehicle (EELV).”

What do you think?