[Congressional Record Volume 157, Number 185 (Monday, December 5, 2011)]
[Senate]
[Pages S8162-S8164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
JOINT STRIKE FIGHTER
Mr. McCAIN. Last week, AOL Defense published an interview with VADM
David J. Venlet, who heads up the Lightning II Joint Strike Fighter
Program for the Department of Defense. In this interview, Admiral
Venlet candidly offered his concerns about where the Joint Strike
Fighter Program stands today. His professional judgment, while welcome
in its forthrightness, is deeply troubling. His concerns, which I
share, are what bring me to the floor this afternoon.
I ask unanimous consent to have printed in the Record a copy of
Admiral Venlet's remarks as contained in the AOL Defense article
entitled ``JSF's Build and Test Was `Miscalculation,' Adm. Venlet Says;
Production Must Slow.''
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From AOL Defense, Dec. 1, 2011]
JSF's Build and Test Was `Miscalculation,' Adm. Venlet Says; Production
Must Slow
(By Richard Whittle)
Washington.--Fatigue testing and analysis are turning up so
many potential cracks and ``hot spots'' in the Joint Strike
Fighter's airframe that the production rate of the F-35
should be slowed further over the next few years, the
program's head declared in an interview.
``The analyzed hot spots that have arisen in the last 12
months or so in the program have surprised us at the amount
of change and at the cost,'' Vice Adm. David Venlet said in
an interview at his office near the Pentagon. ``Most of them
are little ones, but when you bundle them all up and package
them and look at where they are in the airplane and how hard
they are to get at after you buy the jet, the cost burden of
that is what sucks the wind out of your lungs. I believe it's
wise to sort of temper production for a while here until we
get some of these heavy years of learning under our belt and
get that managed right. And then when we've got most of that
known and we've got the management of the change activity
better in hand, then we will be in a better position to ramp
up production.''
Venlet also took aim at a fundamental assumption of the JSF
business model: concurrency. The JSF program was originally
structured with a high rate of concurrency--building
production model aircraft while finishing ground and flight
testing--that assumed less change than is proving necessary.
``Fundamentally, that was a miscalculation,'' Venlet said.
'You'd like to take the keys to your shiny new jet and give
it to the fleet with all the capability and all the service
life they want. What we're doing is, we're taking the keys to
the shiny new jet, giving it to the fleet and saying, `Give
me that jet back in the first year. I've got to go take it up
to this depot for a couple of months and tear into it and put
in some structural mods, because if I don't, we're not going
to be able to fly it more than a couple, three, four, five
years.' That's what concurrency is doing to us.'' But he
added: ``I have the duty to navigate this program through
concurrency. I don't have the luxury to stand on the pulpit
and criticize and say how much I dislike it and wish we
didn't have it. My duty is to help us navigate through it.''
Lockheed Martin, prime contractor on the Pentagon's biggest
program, has been pushing hard to increase the production
rate, arguing its production line is ready and it has reduced
problems on the line to speed things up. Speeding up
production, of course, would boost economies of scale and
help lower the politically sensitive price per plane.
But slowing production would help reduce the cost of
replacing parts in jets that are being built before testing
is complete, Venlet said. Although fatigue testing has barely
begun--along with ``refined analysis''--it's already turned
up enough parts that need to be redesigned and replaced in
jets already built that the changes may add $3 million to $5
million to each plane's cost.
The price of the F-35, being built by Lockheed Martin Corp.
in three variants, has averaged roughly $111 million under
the most recent Low Rate Initial Production (LRIP) Lot 4
contract.
The required changes to the aircraft aren't a matter of
safety or of the F-35's ability to perform its missions,
Venlet said. They're necessary, though, to make sure the
plane's structural parts last the 8,000 hours of service life
required. Nor are the weaknesses surprising in the world of
fighter jets, he added. The discoveries are ``not a quote
`problem with the airplane,' '' Venlet said. ``It's a fighter
made out of metal and composites. You always find some hot
spots and cracks and you have to go make fixes. That's
normal. This airplane was maybe thought to be a little bit
better, wouldn't have so much discovery. Well, no. It's more
like standard fighters.''
Venlet declined to say how much he thinks production should
be slowed. Earlier plans called for the Pentagon to order 42
F-35s in fiscal 2011, but that was cut to 35 and more
recently it was dropped to 30. Previous plans, which Venlet's
comments and the unprecedented pressure to cut the defense
budget make clear will change, had been to ramp up orders to
32 in fiscal 2012, 42 in fiscal 2013, 62 in fiscal 2014, 81
in fiscal 2015 and 108 in fiscal 2016 before jumping to more
than 200 a year after fundamental fatigue and flight testing
is done.
Officially the ``Lightning II,'' the F-35 is a stealthy
attack jet Lockheed is building with major subcontractors
Northrop Grumman Corp. and BAE Systems for the Air Force,
Navy, Marine Corps and II allied nations. There is a
conventional take off and landing (CTOL) version, an aircraft
carrier-suitable (CV) model and a short takeoff/vertical
landing (STOVL) jump jet that hovers and lands much like a
helicopter. The U.S. services alone are scheduled to buy
2,443 to replace a variety of older fighters, making the $379
billion program the Pentagon's largest.
Venlet's comments address a key issue in negotiations
between the government and
[[Page S8163]]
Lockheed for the next contract, LRIP 5. The government paid
for design changes and retrofits through the first four lots,
but Pentagon acquisition chief Frank Kendall issued a memo in
August requiring Lockheed to bear a ``reasonable'' share of
such costs in LRIP 5. Lockheed complained last month that the
government was refusing to reimburse it for parts the company
was buying in advance for LRIP 5 aircraft as the price and
terms of that next production contract are negotiated.
``We negotiated the LRIP 4 contract with a certain amount
of resources considered to pay for concurrent changes,''
Venlet said. ``We were probably off on the low side by a
factor of four. Maybe five. And we've discovered that in this
calendar year, '11, and it's basically sucked the wind out of
our lungs with the burden, the financial burden.'' On top of
that, he added, the cost of concurrency changes figures to
grow as more testing is done--one reason it's important to
slow production rather than testing.
``Slowing down the test program would be probably the most
damaging thing anybody could do to the program,'' Venlet
said. ``The test program must proceed as fast as possible.''
Flight testing of the F-35, though going extremely well
lately, is only 18 percent complete, Venlet said. As of Nov.
29, 1,364 test flights had been flown--896 of them in the
past 10 months, despite two stoppages of a couple of weeks
each to fix problems found by flying. Under a new program
baseline created after the JSF project breached cost limits
under the Nunn-McCurdy law, about 7,700 hours of flight tests
are planned. ``That's a lot,'' Venlet said, adding that
number will grow if more problems are found.
Fatigue testing has barely begun, Venlet said. The CTOL
variant's fatigue testing is about 20 percent complete; the
CV variant has not started yet. For the STOVL variant,
fatigue testing was halted at 6 percent last year and has not
resumed after a crack in a large bulkhead in the wing was
found, requiring a major redesign of that part.
That bulkhead crack was one of five discoveries in the F-
35B that required engineering changes, one reason former
Defense Secretary Robert Gates placed it on ``probation''
last January and said the Marine's plane should be canceled
if the problems weren't solved within two years. Venlet
repeated earlier statements that he was sure the changes
needed to take care of the problems are now in place, though
he wants to await final testing of them this winter before
saying it's time for the jump jet to come off of probation.
After discovering the bulkhead crack in the B variant last
year, Venlet explained, ``We said, `Well, where else do we
need to look?' The fallout of that additional analysis has
revealed additional spots that (may fail in) less than 8,000
hours of service life. We call them `analyzed low-life hot
spots.' '' In other words, he said, engineering analysis
indicates those spots ``are going to crack'' well before the
parts in question have flown 8,000 hours.
``The question for me is not: `F-35 or not?' '' Venlet
said. ``The question is, how many and how fast? I'm not
questioning the ultimate inventory numbers, I'm questioning
the pace that we ramp up production for us and the partners,
and can we afford it?''
Mr. McCAIN. Mr. President, I will briefly summarize the history of
the Joint Strike Fighter Program that has taken us where we are today.
In a nutshell, the Joint Strike Fighter Program has been both a
scandal and a tragedy. The JSF Program has been in the development
phase for 10 years. Over that time, it has been the beneficiary of an
estimated $56 billion of taxpayer investment. Yet after so much time
and so great an investment by the taxpayers, we still don't have an
aircraft that provides the Air Force, Navy, and Marine Corps with the
combat capability they need. In fact, flight testing sufficient to
demonstrate the full mission systems and weapons delivery capability of
F-35 aircraft has not even started. At this point, this most advanced
phase of flight testing won't begin any sooner than 2015.
Developing and buying these aircraft and building the facilities to
support them was originally supposed to cost $233 billion. However,
according to the April 2011 Government Accountability Office report on
the Joint Strike Fighter, these costs are now estimated to be closer to
$383 billion. Let me repeat that. The original cost was estimated to be
$233 billion. Now it is estimated to be $383 billion. That is an
increase of some $150 billion of the taxpayers' money. This increase in
total development and acquisition costs will only get worse when the
Department announces a new baseline cost estimate, which resulted from
a second restructuring of the program over the last 2 years.
Overall, the schedule for the end of the development phase and start
of full-rate production has slipped 5 years since the current baseline
was set in 2007, and it is now planned for 2018. I want to point out
that during this period of time, the manufacturer, Lockheed Martin, has
continued to make record profits. In fact, they just announced their
third-quarter profits to be $700 million. Here is the manufacturer that
was supposed to build an aircraft that was going to cost $233 billion,
and now it is estimated at close to $383 billion--a $150 billion
increase--and it is well known now that there will be significant cost
increases to follow in light of the production manager, Admiral
Venlet's remarks.
In 2001, 10 years ago, the Department of Defense told Congress that
the Joint Strike Fighter would cost about $69 million per aircraft. But
according to the GAO's report from April, the cost of each F-35
aircraft has now risen to about $133 million per plane. Including the
cost of research, development, and testing across the entire program,
the unit cost of each individual aircraft goes up to $156 million. In
inflation-adjusted dollars, that is about double the original 2001
estimate. Unfortunately, we know that the estimate will go up
substantially when the Pentagon releases its latest projections, with
the costs of restructuring the program factored in and a new cost
baseline is established for the program.
As if these costs of developing and buying the aircraft were not high
enough, the Pentagon now estimates that operating and sustaining these
new aircraft may cost as much as $1 trillion over their planned service
life. Thankfully, I think we have reason to believe this jaw-dropping
number may be artificially high and can be reduced. But keep in mind
that the rule of thumb is that the cost of developing and buying a
major weapons system tends to be about one-third of its total cost; the
other two-thirds is in operating and sustaining it. So with the
development and procurement costs of the F-35 already approaching $400
billion, it would not be unreasonable to expect sustainment costs of
about $800 billion over the F-35's lifespan. That amounts to about a
$1.2 trillion investment of taxpayer resources, which makes the F-35
the most expensive weapons program in history.
Over the nearly 10-year life, so far, of the F-35 program, Congress
has authorized and appropriated funds for 113 of these weapons systems,
but as of today the program has delivered just 18 aircraft, most of
which are being used for flight testing. The first production aircraft
intended for training just started to be delivered this summer--3 years
late.
In July, the numbers came in on how much these early production model
jets will cost compared to original estimates. That was a shocking $1
billion over the original estimate of about $7 billion. Under the cost-
plus contracts for these early production aircraft, taxpayers will be
on the hook for $771 million to cover their share of this cost overrun
for these first 28 aircraft. Let me repeat that taxpayers of America
are now on the hook for $771 million in cost overruns to cover their
share for the first 28 aircraft, and Lockheed Martin will absorb the
cost of $283 million. Maybe that helps you understand why Lockheed
Martin, in the third quarter of this year, has been able to announce a
profit of some $700 million. The cost of the first 28 is a 15-percent
cost overrun when you total everybody's share. So for about $8.1
billion, we get 28 aircraft at a cost per aircraft of about $289
million.
Just last week, we learned that the costs associated with the fourth
lot of these early production aircraft may be as high as 10 percent
over that contract's $3.46 billion target cost. That is a $350 million
overrun, with only about 40 percent of the work completed to date. That
tells us that the costs of the program have still not been contained
despite 2 years of very concentrated effort by the Pentagon to bring
costs under control, knowing the future of the program hangs in the
balance.
This brings us to where we are today and the context of Admiral
Venlet's remarks. The Pentagon has recently completed its analysis of
how much the next lot--the fifth lot--of early production aircraft
``should cost'' and is negotiating with Lockheed Martin on who will
bear the cost of changes to the design and manufacturing of the
aircraft that could result from thousands of hours of flight testing
that lie ahead.
[[Page S8164]]
It is at this exact moment that the excessive overlap between the
development and production that was originally structured into the JSF
Program--called concurrency--is now coming home to roost. It means that
you deliver aircraft to the owners--in this case, the Air Force--and at
the same time continue testing. That is something we warned against
over and over as not having worked, but it was done in order to make an
effort to have some semblance of their schedule being adhered to of
delivery of aircraft. Lockheed Martin doesn't want to bear the risk of
new discoveries that may require retrofit or redesign of the aircraft.
Based on the in-depth studies the Department has conducted to date,
Admiral Venlet told the publication AOL Defense last week that the
Joint Strike Fighter Program needs to slow down production and
deliveries of the aircraft. He explained that this was necessary to
open the aircraft and install fixes to numerous structural cracks and
``hot spots'' the program has discovered in the plane in the last year
or so. He estimated that the work needed to remedy these cracks could
add an additional $3 million to $5 million per aircraft.
Bear in mind that this revelation comes on top of the fact that the
Department has just reduced the latest F-35 purchase--what will be lot
five--by five jets. Admiral Venlet concluded that even as the Pentagon
negotiates with Lockheed Martin on lot five of the aircraft under the
terms of a fixed-price contract, there is much ``heavy learning'' that
remains in the program.
Here is what Admiral Venlet said:
The analyzed hot spots that have arisen in the last 12
months or so in the program have surprised us at the amount
of change and at the cost. Most of them are little ones, but
when you bundle them all up and package them and look at
where they are in the airplane and how hard they are to get
at after you buy the jet, the cost burden of that is what
sucks the wind out of your lungs. I believe it's wise to sort
of temper production for a while here until we get some of
these heavy years of learning under our belt and get that
managed right. And when we've got most of that known and
we've got the management of the change activity better in
hand, then we will be in a better position to ramp up
production.
Mr. President, 2001 was the year we decided to build this aircraft.
So here we are 11 years later, and the manager of the program says,
``And when we've got most of that known and we've got the management of
the change activity better in hand, then we will be in a better
position to ramp up production.'' I am not making this up. Admiral
Venlet, who overseas the JSF Program for the Pentagon, is basically
saying that even after the program was restructured 2 years ago by
Secretary Gates to add $7.3 billion and 33 more months to development,
there is still too much concurrency baked into this program. In other
words, the overlap between development and production is still too
great to assure taxpayers that they will not have to continue paying
for costly redesigns or retrofits due to discoveries made late in
production. In that context, ramping up production--even under the
program's revised schedule--would not be a move in the right direction.
I absolutely agree.
When the head of the most expensive, highest profile weapons system
program in U.S. history effectively says: Hold it, we need to slow down
how much we are buying, we should all pay close attention.
What does this mean in terms of the pending negotiations for the next
production lot? As I said a few days ago during my opening remarks on
Senate consideration of the fiscal year 2012 National Defense
Authorization Act, I strongly support the Department's position. I
think Admiral Venlet's concerns are completely consistent with the view
reflected in the Senate Armed Services Committee's markup of the
Defense authorization bill.
As we negotiate to buy more early production jets at a time when most
of the developmental testing of the aircraft is yet to be done,
Lockheed Martin must be held increasingly accountable for cost overruns
that come as a result of wringing out necessary changes in the design
and manufacturing process for this incredibly expensive weapons system.
For this reason, the Department must negotiate a fixed-price contract
for this next lot of aircraft that requires Lockheed Martin to assume
fully any cost overruns. I expect that this contract negotiation will
reflect unit costs that are lower than for the last lot purchased and
that the contract will ensure shared responsibility for reasonable
concurrency cost increases.
Put simply, the deal we negotiate on this next production lot must be
at least as good, if not better, than the deal we negotiated under the
previous one; otherwise, I can only conclude that we are moving in the
wrong direction, and it will only be a matter of time before the
American people and the Congress and our allies lose faith with the F-
35 program, which is already the most expensive weapons program in
history.
One thing is clear: The culprit is, among other things, excessive
concurrency, which is overlap of trying to develop an advance aircraft
at the same time as we buy production model aircraft intended for
training and operations. The danger of excessive concurrency is the
grand, enormously expensive lesson of the Joint Strike Fighter Program,
a lesson we continue to overlook at our peril: Trying to execute a
strategy for the acquisition of a major weapons system that has too
much concurrency based into it under a cost-type contract is absolutely
a recipe for disaster.
In so many different aspects, the F-35 program truly represents a
tragedy. The Air Force, Navy, and Marine Corps desperately need a new
aircraft to take the place of the current strike and fighter jets that
have been at war for most of the last 10 years. These well-worn legacy
aircraft are coming to the end of their service lives, but we are
saddled with a program that has little to show for itself after 10
years and $56 billion in taxpayer investment that has produced less
than 20 test and operational aircraft, a bill for $\3/4\ billion, and
the promise of considerable ``heavy learning'' yet to go.
Admiral Venlet's message last week clearly conveyed the path we are
on is neither affordable nor sustainable. On that fact he and I are in
total agreement. But that agreement provides very little solace. If
things don't improve quickly, taxpayers and the warfighters will insist
all options will be on the table, and they should be.
Mr. President, I came to the Senate floor today to talk specifically
about the F-35 aircraft. I will be coming to the floor again on the
whole issue of what is, unfortunately, a culture of corruption in the
Pentagon as far as weapon systems acquisition is concerned. Time after
time, with regard to the future combat system, the F-35, the
shipbuilding, the littoral combat ship, there is story after story
after story of cost overruns, of cancellation, of delays, of incredible
cost to the taxpayer. We never should have gotten into it. We simply
cannot afford to do it now. We have to reform the culture of corruption
that pervades the Pentagon, and we must reform the way we acquire the
weapons and the systems necessary to defend this Nation.
I am not saying there aren't success stories. Certainly, there are.
MRAP is an example of a success story. But when we look at the tens of
billions and billions of dollars that have been wasted on research and
development on weapons systems that never got off the ground, when we
look at what happened to the future combat systems, the littoral combat
ship, now the F-35, there must be reform or the taxpayers and citizens
of America will lose faith in our ability to defend this Nation at a
cost that is reasonable in these extremely difficult economic times for
all Americans.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KYL. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KYL. Mr. President, I ask unanimous consent I be allowed to speak
as in morning business for up to 15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________