WASHINGTON (Reuters) - The Pentagon has already cut its most troubled weapons programs and others that are no longer needed, and may be able to avoid further major program cancellations, a top U.S. defense official said on Wednesday.
“I think it’s fair to say that the poorest performers were identified in FY10,” Ashton Carter, defense undersecretary for acquisition, technology and logistics, told a defense industry conference hosted by Aviation Week.
“I hope that, after a certain amount of trimming of the underbrush, that that won’t be necessary,” Carter said, when asked to identify possible future cuts.
The Pentagon identified “a large number of programs that were essentially canceled for cause,” in fiscal 2010, which ends September 30, Carter said, plus additional programs that were no longer needed in fiscal 2011, including the Boeing Co C-17 transport plane.
Carter said he was continuing to carefully review major weapons programs such as the Lockheed Martin Corp F-35 fighter jet and to restructure them if necessary. But he was also devoting time to protecting well-performing programs.
“In this town, that’s something you have to actually devote a little effort to because there’s always somebody out to get every program, or thinks they have a better idea, or some other better way of spending the money,” Carter added.
Carter said U.S. defense spending would continue to rise in real terms, but not at the double-digit rates seen after the September 11, 2001 hijacking attacks.
He said the department was continuing its efforts to save money and improve the way the Pentagon buys and develops its weapons, and said Defense Secretary Robert Gates would not hesitate to cancel programs that were no longer needed or missing their cost and schedule targets.
“A quick way to put yourself in jeopardy is not to perform,” Carter told the conference.
In addition to stepping up oversight of major weapons programs and improving the way they were set up initially, Carter said his office was looking at contract structures, overhead costs and indirect costs.
He said the Pentagon also planned to do more of its systems engineering work, but would likely continue to use private contractors for that work in some cases.
He said he was satisfied that the Pentagon’s restructuring of the F-35 program was based on more “solid and realistic” estimates, and would reverse the slips in schedule that had plagued the program in recent years.
The Pentagon would build fewer fighters than expected in coming years, to allow for more testing, but the total U.S. purchase — which has remained steady at 2,443 fighters for years — was unchanged, Carter said.
He said the current procurement plan is based on an independent cost estimate that exceeds that of the F-35 program office, but he had challenged Lockheed to “do better” and would “make adequate allowance” for it to beat those estimates.
He praised Lockheed’s “responsiveness and commitment” to restructuring the program and said the company would share the burden of the restructuring costs. Gates said the Pentagon was withholding $614 million in award fees from Lockheed.
Reporting by Andrea Shalal-Esa; Editing by Andre Grenon and Steve Orlofsky