Leaving a military acquisition job and returning to the fleet has got me focused. I’ve enjoyed learning the process that moves a naval prototype from developmental model to a full-up fleet capability. But it is a slow chug – there are certain waypoints that Congress mandates to ensure that the taxpayers get maximum benefit. And each of those milestones require substantial work to meet. Some are important and some are red-tape heavy, with unnecessary slowdowns (in my humble opinion.)
Another challenge with military acquisition is that there are factors beyond delivering the very best capability to the Navy. Such as politics, jobs, and regional considerations:
Illinois is home to another important aerospace sector: defense. For example, the F-35 Joint Strike Fighter program is supported by Illinois manufacturing companies. Across the state, roughly 2,000 jobs are tied to the program through about 50 suppliers. In terms of economic impact, the F-35 program contributes about $525 million to state and local economies.
Despite the economic opportunity the F-35 represents to Illinois, forces outside the state conspire to reverse the momentum we’ve seen. The project has been mired in unfounded criticism, the perception of unchecked cost overruns has soured many spectators and sequestration has complicated matters even more with constraints on spending.
In complex production projects like the F-35, substantial investments are made by suppliers in the program’s developmental stages and are only recouped when the program moves into full production. Full production occurs when the supply chain becomes more efficient at reducing costs and economies of scale are realized. Last year, F-35 program costs dropped by $4.5 billion. F-35 suppliers have already paid about one-third of the cost overruns in the first three lots of production and have committed to paying 100 percent of any overrun of the contract ceiling in the fourth lot of production and beyond. Even the congressional watchdog agency, the Government Accountability Office, concluded that the program is moving in the right direction in a recent audit.
The cost issue cannot be truly addressed unless it is placed into a larger context of costs incurred versus costs saved. Once it is fully deployed, the F-35 will be used by the Air Force, Marines and Navy. The program would replace as many as seven legacy aircraft. The Pentagon projects that total maintenance costs for the legacy fleet would be four times the comparable maintenance costs of the F-35.
I think the F-35 is going to be a strong, albeit expensive, capability for our Navy.