USAF Rejects DoD Cost Estimates for F-35 Negotiations

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

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

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