Pentagon hyped $1.2bn F-35 savings claim, say senators

Bloomberg

Senators have chided the Pentagon’s F-35 program office for claiming $1.2 billion in purported savings from buying parts and equipment for Lockheed Martin Corp.’s fighter jet in bulk after an independent analysis found the benefit is likely to be half that.
Program office officials sought and won congressional approval last year to spend $661 million as a down payment on parts for 207 US aircraft to be purchased in 2019 and 2020. The pitch was that this would save $1.2 billion for the US and allies that buy the fighter, split evenly.
Officials testified to Congress last year that the estimated savings were validated by in-house evaluators, “an industry analysis and an independent assessment conducted by Rand Corp.”
Bethesda, Maryland-based Lockheed was put on contract for $661 million on June 8.
But an assessment by the
Defense Department’s Cost Assessment and Program Evaluation office, sought by Senate Armed Services Committee Chairman John McCain of Arizona, found the savings will total $600 million, including $300 million for US aircraft.
“While these savings are still significant,” the Senate Appropriations Committee, one of the four panels that approved the money, said in the report on
its fiscal 2019 defense spending bill that it’s “dismayed by
the inaccuracy of the initial
estimates.” The committee wants the F-35 Joint Program Office to submit a report within 30 days of the spending bill becoming law explaining the different estimates and its plan to make up for funding shortfalls.
The Senate bill must be reconciled with the House Appropriations Committee version, which doesn’t contain the criticism or the report requirement.
Despite the dispute over parts estimates, both funding panels treated the $406 billion F-35 acquisition program well. The Senate panel added $1.2 billion to speed the purchase of 12 fighters on top of the 77 the Pentagon requested. The House Appropriations Committee earlier added 16 F-35s in its version of the measure.