USAF Rejects DoD Cost Estimates for F-35 Negotiations

The U.S. Air Force’s top acquisition official said June 18 that the
service is not using the Pentagon’s latest cost estimates as its
baseline price in its negotiations for the F-35A Joint Strike Fighter.

“There is no vectoring by the [F-35] negotiating team” based on
estimates by the Pentagon’s Cost Assessment and Program Evaluation
(CAPE) office released this month predicting that the overall costs of
the airplanes could reach as high as $92 million each, David Van Buren,
assistant secretary of the Air Force for acquisition, said during a
briefing. “We’re focused on the instant contract proposal at hand.”
The Pentagon’s top weapon buyer, Ashton Carter, “holds us
accountable not to accept a will cost [estimate] but to drive for the
lowest cost across the board,” added Van Buren.
This means that
Air Force negotiators are pushing aggressively for what “we believe is
the appropriate cost” for the jets, Van Buren said. He did not
elaborate on those numbers.
Lockheed Martin has said for months
that the Pentagon’s initial offer for the latest batch of 32 low-rate
initial production F-35s, known as LRIP-4, was 40 percent below the
CAPE’s December 2009 cost estimate for the program, which at the time
pegged the costs at roughly $76 million per plane in 2010 dollars.
Officials
from the Bethesda, Md.-based firm first said in April that the final
contract for LRIP 4 will be signed at more than 20 percent below the
December 2009 CAPE estimates.
On June 17, Steve O’Bryan,
Lockheed’s vice president of F-35 business development, reiterated the
company’s stance that its LRIP 4 jets will be priced more than 20
percent below those estimates, noting that the price of its LRIP 3 lot
of jets also came in at a price 20 percent below the Pentagon’s 2009
predictions.