Leaked Budget Plans Hint at JSF Program RestructuringJanuary 14, 2010

 

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The Pentagon will present its 2011 defense budget to Congress in early February—and early indications spell bad news for the F-35 Joint Strike Fighter (JSF) program and its prime contractor, Lockheed Martin, according to an article in Bnet.

One of the first steps in forming the budget is for the Office of the Secretary of Defense to issue Presidential Budget Decisions, or PBD, that instruct the military services and defense staff to structure their budgets to meet guidelines set by the president and the executive branch

According to the direction from the president, the JSF program timeline will be extended while annual production levels slow. The Pentagon plans to pay for higher development costs with the funds saved by reducing the number of jets it buys each year. The Pentagon will cut its order by 10 units in fiscal 2011, reaching total production of 122 through 2015, according to Bloomberg News. That will shift more than $2.8 billion into development that had been budgeted earlier to buy fighters, according to Bloomberg.

This decision, however, is likely to increase costs in the long run, according to the article. As more jet production gets pushed into the later years of the contract, overall costs are likely to increase. Current funding levels, then, would not cover the original order, which could force the Pentagon to extend the purchase period. Moving some delivery dates further into the future also will require extending the service of the F-15, F-16, A-10 and F-18 aircraft that the JSF is to replace. Servicing older jets to remain combat ready will also strain the budget.

JSF costs also depend on contributions from the United Kingdom and the Netherlands, which based their commitments on prices for a fixed number of jets. If the prices rise because of development delays, the article contends, the two countries will not be able to buy the same number of jets as originally planned. And if they buy fewer jets, the price will jump higher for each jet. The PBD runs counter to the Obama administration's push to accelerate the development and production of the JSF, but the Pentagon notes that the decision is not yet final, according to Bnet.