F-35, Apache AH-64 Get Votes Of Confidence
The Department of Defense has
certified that six acquisition programs - including the Joint
Strike Fighter and the Block 3 upgrade program for the Apache AH-64
helicopter, should continue under Nunn-McCurdy legislation.
The systems also include the the DDG-1000 destroyer, the
advanced threat infrared countermeasures/common missile warning
system, the wideband global satellite communications program and
the remote mine hunting system.
Nunn-McCurdy legislation requires DoD to constantly estimate the
cost of programs and compare it to the estimate of the cost when
the program started. When a program grows more than 50 percent
beyond the original estimate, the legislation requires the DoD
acquisition executive to certify to Congress "that the program is
essential to national security, that there are no alternatives to
the program which will provide acceptable capability," a senior
defense official speaking on background said Tuesday.
None of the programs on the Nunn-McCurdy list are surprises to
the department or to Congress, the official said. DoD notified
Congress that the programs were in Nunn-McCurdy breach 90 days
ago.
The Joint Strike Fighter program began in 2001. Officials then
estimated the per plane cost at $50 million. The program has had
problems and Defense Secretary Robert M. Gates restructured it last
year. The cost per aircraft has risen to $92.4 million, triggering
Nunn-McCurdy. Other aspects contributed to the breach: the Navy
reduced its buy by 409 aircraft. Also, contractor labor, overhead
rates and fees have increased significantly. This last is the
single-largest contributor to cost growth, officials said. They
called this cost growth unacceptable and vowed to drive those costs
down.
In a report sent to Congress Tuesday, the Pentagon said that the
price-per-plane, which includes R & D and well as construction,
has ballooned to $112.4 million, or about 81 percent more than the
2002 $62 million price tag per airplane. The report shows it is
also four years behind schedule.
Bloomberg reported that Lockheed Martin disputes the
independently-produced estimate. Spokesman Chris Geisel wrote an
e-mail saying that all of the airplane's contracts have come in
below government estimates, and that there is "no scenario" that
brings the cost of an F-35 "anywhere near" $112 million.
The Apache Block 3 program is on the list because the department
added new aircraft to a program that was refurbishing existing
aircraft. "We're very satisfied with the program, but the
additional aircraft pushed it into Nunn-McCurdy breach," the
official said.
DoD cannot wait until a program is in Nunn-McCurdy breach before
acting. "We should know and do know ... well before it gets to 50
percent cost growth," the senior official said. Officials, he said,
must know early on when program costs exceed estimates, ask
questions, and then act on what they learn.
"The Nunn-McCurdy 'bell' rings well after the managers of the
enterprise should know about what is happening and should be
acting," the senior official said. "It comes along late." The
legislation is good for taxpayer transparency, but there are other
ways to do that, the official said.
"We need and are building better tools," he said.