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McCain: ‘Breakdown’ In F-35 Contract Talks Sign Of Big Acquisition Problems

Posted by Colin Clark on

Sen. John McCain

Sen. John McCain

WASHINGTON: The decision to force Lockheed Martin to accept the government’s price for the ninth Low Rate Initial Production batch of F-35s is a “symptom” of wider problems with the Pentagon’s acquisition system, Sen. John McCain said in a statement today. But is the Senate Armed Services chairman right?

McCain said “the recent breakdown in F-35 contract negotiations between the Department of Defense and Lockheed Martin is troubling and disappointing.” In his statement he called it “another symptom of our flawed defense acquisition system in general and the structure of the F-35 program in particular.”

In a letter to Defense Secretary Ash Carter released later in the day, McCain talked about an additional $1 billion overrun for the F-35 program. However, it’s unclear just what the senator is referring to.

The F-35 Joint Program Office says that $530 million will be needed to pay for delays caused by the 2014 engine fire, to recoup $100 million pulled from the program by the Pentagon and delays to software testing, and to pay for $165 million of new requirements requested by the military that were funded by the JPO.

Where will the money come from? Most will come from “other F-35 JPO funding sources to minimize the impact on the U.S. Services and DoD overall budget requirements,” JPO spokesman Joe DellaVedova said in an email. The program’s international partners will not have to pay. It’s unclear just how much new money will be needed in the fiscal 2018 budget.

My colleague Tony Capaccio quoted an email from the head of Pentagon acquisition, Frank Kendall, who wrote that he was “disappointed to hear that additional funds would be needed” and “we are working to minimize the size of the shortfall and to deliver options to address it.”

But McCain’s main complaint to Carter is that concurrency — “the decision to produce hundreds of aircraft, on a cost-plus basis, before the technology is developed and completed, and to do all of this, lot after lot, without an actual contract in place between the government and industry (–) is the height of acquisition malpractice.” Of course, almost every senior Pentagon and JSF official has conceded that repeatedly for the last few years, and there doesn’t appear to be any intent by anyone to build another system in the same fashion any time soon.

So I don’t think McCain is right that this particular case is a symptom of the need for acquisition reform. Instead, concurrency is an existing problem acknowledged by pretty much every responsible leader in the Pentagon. The F-35 appears well on its way to Full Operational Capability. While no one same person would claim that the program or Lockheed Martin executed well in the aircraft’s first decade, it appears to be well on the way to providing what Kendall recently described as an excellent weapon system.

The case for acquisition reform was clear more than a decade ago, but neither Congress nor the Pentagon did much. Now they are.

What do you think?