A vicious circle

This comes on top of February’s partial restructure which saw US$2. 8bn (A$3. 1bn) shifted from acquisition to development and 13 months added to the development timescale, and an interesting US Quadrennial Defense Review (QDR) which suggested the USAF will only ever require about two-thirds the 1763 F-35As it has said it needs (refer p25 for details).

The Nunn-McCurdy process, named after the law’s two sponsoring legislators, would see Pentagon and program officials brought before Congress to not only justify the program’s existence in light of alternative capabilities, but to also assure them that costs and schedule are under control moving forward. Cancellation is unlikely, given that there are no alternatives to the JSF unless enhanced versions of current generation fighters are deemed acceptable, or the USAF can wait until unmanned systems mature. But costs and schedules are another thing altogether, particularly with ongoing blowouts and slips to even the most recently ‘re-baselined’ figures.

US Defense Secretary Gates’s February restructure saw LRIP (low rate initial production) numbers drop by about a third and full rate production pushed back a year to late 2016. This will mean an extra run of LRIP jets (LRIP 8) will be added in 2015, and USAF Operational Test & Evaluation (OT&E) of its F-35A version pushed back into 2015.

OT&E is particularly important in an aircraft’s development, as it gives everyday air and ground crews the chance to fully wring the aircraft out in day-to-day type operations, and frequently results in design changes being required. As a consequence, the USAF has deferred its planned IOC for the F-35A from 2013 to 2015.

For Australia’s planned F-35 buy, the USAF’s new schedule means the buffer the RAAF had built into its JSF schedule has been effectively halved.

NACC project head AVM John Harvey told AA last issue that he expected the RAAF to declare IOC by 2017/18, meaning it needed to have its own OT&E finished before then.

Further delays would likely mean a slip in the RAAF’s IOC plans, placing more pressure on its ageing classic Hornet fleet which is due to start being wound down from 2015.

Curiously, rather than expressing concern at the recent delays and their potential implications, Australian Defence Minister John Faulkner commended Gates’s move. Andrew Davies from ASPI (the Australian Strategic Policy Institute) pointed out recently that Faulkner “welcomed the restructuring of the program. Why is the third major restructuring in eight years greeted with applause?” Certainly the government and Defence have consistently talked up the program despite the delays, and apart from program participation funds and agreements, the Commonwealth is yet to kick in any serious money or sign any purchase contracts for the F-35. So while there remains faith within Defence in the capabilities the F-35 will eventually offer, maybe it’s time to start acting like customers and openly question some of the program’s failing processes and milestones.

Chief of Air Force AIRMSHL Mark Binskin has made some efforts in this area with his March 22 letter to the editor of The Australian in which he attempted to separate the issues of capability and schedule, but letters to the editor are always buried deep and read by few.

But perhaps it is the QDR process which should be of most concern. The reduction of the F-35’s planned production run by roughly 600 units, or 20 per cent, would have huge per unit cost implications for all F-35 customers, including Australia.

Such a cost increase may result in some countries or perhaps the US Navy reducing, deferring or even cancelling some or all of their planned buys, thus placing even greater cost pressure on early build aircraft and so on, a vicious circle that would torpedo the key driver of the entire program – cost.

For Australia’s planned F-35 buy, the USAF’s new schedule means the buffer the RAAF had built into its JSF schedule has been effectively halved.