Joint Strike Fighter Cost Overruns

March 15, 2010

The Pentagon has informed Congress about another of its procurement projects that is plagued by cost overruns. In other news, the sun will rise and set today, and the pope is Catholic. 

Pentagon officials told the Senate Armed Services Committee on Thursday that costs for the F-35 Joint Strike Fighter have jumped more than 50 percent since the program began in 2001. Testifying before the committee, the Government Accountability Office noted that it has reviewed the JSF effort five times and the findings haven’t been positive: 

We have consistently reported on the elevated risk of poor program outcomes from the substantial overlap of development, test, and production activities and our concerns about the Government investing in large numbers of production aircraft before variant designs are proven and performance verified in testing.
In our March 2009 report, we again noted development cost increases, additional delays in manufacturing and testing schedules, and the government’s increased financial risk from plans to increase procurement in advance of testing. 
The GAO reports that just since 2007 the “total estimated acquisition costs have increased $46 billion and development extended 2 ½ years.” Incredibly, the GAO says that the Pentagon still “does not have a full, comprehensive cost estimate for completing the program.”
In private industry, it would be hard to imagine that a company and its contractors would put in such a poor performance, at least as a matter of routine, which it is with weapons procurement.
Bungled weapons procurement is not just the Pentagon’s fault. Congress is often at fault as well, as a Cato essay on cost overruns points out: 
Still, Congress, not the Pentagon, deserves the main blame for cost overruns since it holds the purse strings. Rather than looking out for taxpayer interests, most members of Congress fight attempts to reduce defense spending in their districts, including spending on weapons that the Pentagon doesn’t even want.
Defense contractors exploit this parochial self-interest of legislators, and they skillfully spread out research and production work across many states and districts to maximize congressional support. The $70 billion F/A-22 fighter program provides an example. The Washington Post noted in 2005 that the F/A-22 “is an economic engine, with 1,000 suppliers — and many jobs — in 42 states guaranteeing solid support in Congress.” In 2009, Defense Secretary Robert Gates wanted to cancel further orders of the aircraft, but hundreds of lawmakers and state governors lobbied President Obama to keep the production lines going to preserve the 95,000 related jobs.




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