The Senate Armed Services Committee (SASC) has stymied the Pentagon’s attempt to shift around funds to cover cost overruns with nascent F-35 Joint Strike Fighters built by Lockheed Martin [LMT].
SASC Ranking Member John McCain (R-Ariz.) last July lambasted the Pentagon’s proposal to reprogram $264 million within its coffers to pay added costs for an initial batch of more than two dozen F-35s, which were pegged to cost more than $771 million above projections. That money-shifting request, according to recently released Pentagon budget documents, is now dead.
The SASC deferred the Pentagon’s request to shift $179 million from other programs to Air Force and Navy F-35 research accounts to cover the cost overruns. The Pentagon also withdrew its request before Congress to rejigger another $85 million in Air Force F-35 funding to cover the larger $771 million pricetag. These changes are shown in newly unveiled budget materials indicating Congress’ response to the Pentagon’s 91-page request from June 30 to reprogram $5 billion in funding.
The Pentagon indicated in August that if Congress did not approve the reprogramming, to cover the cost overruns with aircraft under Low Rate Initial Production (LRIP) 1-3 contracts, the Pentagon might have to cut the number of F-35s in an upcoming buy.
William Lynn, who retired as deputy defense secretary this month, warned in a July 25 letter to McCain and SASC Chairman Carl Levin (D-Mich.) that if the reprogramming request is denied the program office would have to use funding within its current budget to cover the costs.
One alternative would be to use money pegged for three conventional-takeoff F-35s funded in fiscal year 2011 for the cost overruns, Lynn wrote at the time. He also said the overrun could be covered through “deep cuts” to tooling, sustainment, spares, and engineering change orders for the LRIP 5 aircraft, a setup that “would have the undesirable effect of increasing costs on the JSF program in subsequent years,” he wrote.
Still, McCain insisted he would not support the $264 million reprogramming request, saying July 14 it would cover “unacceptable cost overruns.” (Defense Daily, July 15)
Levin and McCain exchanged letters with the Pentagon over the summer with questions about the legal options for paying the cost increases to Lockheed Martin as well as the cost of terminating the overall F-35 program.
McCain lamented F-35 cost overruns in comments to reporters on Capitol Hill last week, saying there are “scandalous cost overruns associated with it.” He, however, stopped short of calling for the multi-service, multi-nation program’s termination. He is expected to discuss the future of the weapons program if and when the Senate debates the fiscal year 2012 defense authorization bill this year.
The Pentagon’s recently published budget documents show Congress denied multiple money-shifting proposals it sent Congress in multiple omnibus reprogramming requests submitted over the summer, before the new fiscal year started Oct. 1. They cover already-appropriated funding for FY ’11 and earlier years.
Lawmakers denied the Pentagon’s attempt to cut $50 million in Army research funding for the Joint Air-to-Ground Missile, thus leaving the $130 million for the program intact. The Army and Navy are said to want to cancel the program.