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Senate wants assurance that F-35 will cost no more than stated  (Source: Lockheed Martin)
any cost overruns would be paid by contractor

The cost of the F-35 JSF continues to soar and delays continue to mount though the aircraft is now finally in production in some variants. As the aircraft stat to roll of the production assembly line, the Senate is taking steps to control the price of the fighter as the next low-rate initial procurement (LRIP) is set to enter negotiations.

The U.S. Senate Armed Services Committee has passed a bill on June 16 that required the LRIP-5 purchase set for 2012 to be at a fixed price. That means that any cost overruns in the development or production of the F-35 purchase will be absorbed totally by suppliers.

An emailed statement from the committee said, "The bill contains a unique requirement that the low-rate initial procurement contract for the FY11 lot of the Joint Strike Fighter (LRIP-5) program must be a fixed-price contract and the contract must require the contractor to absorb 100 percent of costs above the target cost." 

The previous LRIP-4 purchase uses a cost-plus award fee plan.

If the full Senate passes the bill, it will be legally binding. Defense News reports that the bill fully supports the Pentagon budget request for the F-35. The budget allots $3.2 billion to purchase Navy versions of the F-35 and $3.7 billion for the USAF version of the fighter. In total, the Pentagon wants 32 F-35 fighters in 2012 with 19 going to the USAF, seven for the Navy and six for the Marine Corps.

Defense News adds that a Defense Acquisition Board review to establish a new cost baseline for the F-35 has been postponed until this fall. The review has been rescheduled for late May before being reset to mid-June and the rescheduled again.

The effort to control the price of the F-35 program comes in part from the estimate that the F-35 program could cost as much as $1 trillion in operating costs.





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