[Congressional Record (Bound Edition), Volume 157 (2011), Part 13]
[Senate]
[Pages 18758-18760]
[From the U.S. 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 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

[[Page 18759]]

     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.
  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.

[[Page 18760]]

  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.

                          ____________________