UPDATE 1-U.S. wants Lockheed to share F-35 cost hikes
*Pentagon buyer mulls buying more test aircraft
*Worst-case cost scenario has gained credibility
*Lockheed declines substantive comment (adds Lockheed Martin comment, Carter quotes, background)
By Jim Wolf
WASHINGTON, Nov 23 (Reuters) - The Pentagon's chief arms buyer said he would like Lockheed Martin Corp (LMT.N) to share the cost of keeping on track its F-35 fighter program, the costliest U.S. arms purchase in history.
The New York Times said on Saturday the Pentagon was considering adding more than $200 million.
"We don't want to be in a situation where the government bears the cost of schedule slips in a program all by itself," Ashton Carter, the under secretary of defense for acquisition, told a small group of reporters on Monday.
"It's reasonable that risk in a program be shared -- be shared equitably," he said, without spelling out how much more he might like to put in to head off possible big overruns in coming years.
Lockheed Martin, the Pentagon's No. 1 supplier by sales, "preferred not to comment on specifics until details are finalized," said Jeffery Adams, a spokesman at company headquarters in Bethesda, Maryland.
He said numerous issues were discussed at a weekend meeting with Carter. The meeting included Robert Stevens, Lockheed Martin's chief executive.
Carter said he was considering adding aircraft to the F-35 testing program to "compress" its schedule. Another idea was adding personnel to speed up completion of the aircraft's mission software, he said.
A multi-service team of Pentagon analysts is reported to have found that the program could need billions of dollars in additional funding to stay on schedule in coming years.
Carter did not disclose the findings of the so-called Joint Estimating Team, but said it was forecasting schedule and cost slips beyond those forecast by Lockheed and the Pentagon's F-35 program office.
He said he would like to "manage differently so that we get a better outcome" than what he described as the JET's worst-case scenario.
A year ago, the JET estimated the program could need as much as $16.6 billion more through 2015. Carter said a lot of what the group had forecast last year had unfolded as it predicted, boosting its credibility.
He said he also was to be briefed later on Monday by a separate team looking at cost increases in the F-35's initial engine, made by United Technologies Corp (UTX.N)'s Pratt & Whitney unit. At the same time, he repeated Pentagon opposition to an alternate, interchangeable engine under development at the insistence of Congress. The second engine is being built by a team of General Electric Co (GE.N) Co and Rolls-Royce Group Plc.
Carter said he had held very constructive talks on Sunday with Stevens, Lockheed's chief executive, and other executives on cost and schedule of the F-35, the Pentagon's most expensive acquisition at a projected $300 billion over the next two decades.
Three variants of the radar-evading F-35 are being developed with financing from the United States and eight partner countries. Competitors include the Eurofighter Typhoon, made by a consortium of British, German, Italian and Spanish companies.
Lockheed's chief F-35 subcontractors are Northrop Grumman Corp (NOC.N) and BAE Systems Plc (BAES.L).
The United States currently plans to buy a total of 2,443 F-35 models -- including 1,763 for the U.S. Air Force and 680 for the Marine Corps and Navy together.
Eight countries have joined the United States to co-finance development of the F-35 -- Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway. (Reporting by Jim Wolf; Editing by Phil Berlowitz and Carol Bishopric) ((firstname.lastname@example.org; +1-202-898-8402; Reuters Messaging: email@example.com))
- Tweet this
- Share this
- Digg this