Is troubled F-35 caught in a 'death spiral'?

The controversial F-35 program took another blow last week when the Navy requested a break from producing F-35C, its variant of the problem-plagued and expensive Joint Strike Fighter.

Congressional sources said officials with the Office of the Secretary of Defense (OSD) worry the 3-year break will lead to a permanent end to the program, according to Politico. Critics have targeted the program in recent years because of high costs and technical problems during development and testing. Last month, a Pentagon report revealed “significant findings” of cracks developing in multiple locations on two of the test aircraft. Fixes may require redesigned parts, which could add additional weight—already a concern for the fighter jet. Also, the report said “measures of reliability and maintainability are all below program target values for the current stage of development.”

The F-35 program has cost nearly $400 billion since its inception in 1996. Estimates of the 55-year lifecycle cost for the entire F-35 fleet range from $1 trillion to $1.5 trillion, making it the most expensive weapons program in history.

But how much does a fighter jet really cost? The recently passed National Defense Authorization Act (NDAA) authorized the procurement of 19 F-35As (the Air Force variant and the least expensive) in fiscal year 2014 at a cost of $2.989 billion. That amounts to $157.3 million for each aircraft. But procurement is only one component of total lifecycle cost. The program has already spent millions of dollars on research, development, and testing. The bulk of the lifecycle budget will be spent on maintaining and operating the planes.

By comparison, the true cost of owning a $20,000 car for 10 years could be as high as $62,000 when taking into account fixed costs, fuel, and maintenance.

Fear of rising costs and concern over concurrent development, testing, and production has Pentagon officials recommending reducing the number of aircraft it plans to buy. But that can also increase the per-aircraft cost, leading to what The Economist warned could be a “death spiral” in which cuts in the number of aircraft ordered would lead to even further cost increases.

The F-35 program could learn some lessons from the F-16, according to Gordon England, a former deputy secretary of defense under Presidents Barack Obama and George W. Bush. Both programs had similar objectives and both experienced their share of early development problems. However, England attributes much of the F-16 program’s success to its commitment to high rates of production, which drove down per-aircraft cost, as well as continuous upgrades during its production life. He argues that the Defense Department needs to change its F-35 management philosophy.

“Production capability has been proved by actual deliveries,” England said. “The F-35 is being artificially confined to low production rates at a point when the F-16 was already roaring ahead.”