Pentagon Sees 'Sufficient' Progress To Boost Fiscal Year 2015 F-35 Output

By Andrea Shalal-Esa/Reuters

Lockheed expects to deliver 36 of the plans in 2013. Current government plans call an increase in F-35 production to 45 jets in the eighth production batch, a deal the government expects to negotiate early next year.

Those plans call for production to increase to 70 in the ninth batch of jets, of which about half would go to Britain and other foreign buyers. The Pentagon plans to award Lockheed a preliminary contract to start buying some materials for those planes later this year or early next.

In the memo, Kendall told program officials to prepare by November 15 a range of acquisition options for that ninth batch of jets that would include “strong, event-based criteria and financial incentives” for Lockheed and engine maker Pratt & Whitney, a unit of United Technologies Corp (UTX.N).

He said he wanted a range of options given uncertainty about future U.S. budget levels, and to “provide a linkage between program performance and production quantities.”

Kendall said he planned to “provide strong financial incentives to LM and P&W to complete development and drive down cost in both production and sustainment.”

The memo also ordered the Pentagon’s top official for systems engineering to complete an independent assessment of the manufacturing risks associated with increasing production by November 15.

Kendall also asked the head of the Cost Analysis and Program Evaluation office to finalize a new estimate for the cost to operate and maintain the fleet of F-35 jets over the next 55 years as part of the fiscal 2015 budget submission.

The CAPE’s previous estimate was $1.1 trillion, but the Pentagon’s F-35 program office puts the cost at $857 billion.

Kendall said the production costs were under control and coming down in line with projections, and progress in the development program had been close to plan.

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