Mei 21 2011

McCain about JSF: “Some of us saw this train wreck coming.”

Gepubliceerd door JSFNieuws.nl om 13:25 onder Ontwikkeling JSF

The F-35 Joint Strike Fighter came under blistering criticism Thursday at a US Senate House Armed Services Committee hearing for ongoing technical problems, for schedule delays and cost overruns that have nearly doubled the cost of each plane and a threatening deadly price-quantity death spiral.

Senator John McCain of Arizona, the panel’s top Republican, warned for the fact that, “…after almost 10 years in development and four years in production, according to outside experts, the aircraft’s design is still not stable, manufacturing processes still need to improve and the overall weapon system has not yet been proven to be reliable”. And “Notably, it has taken Lockheed about 15 years and cost the taxpayer $56 billion to produce and deliver nine of 12 test aircraft. Over that period, Congress has authorized and appropriated funds for 113 F-35 jets. Lockheed has, however, delivered just 11.”

McCain sharply questioned the cost figures and said Some of us saw this train wreck coming. (See: LINK, 2008 early warnings”) (…) “Lockheed Martin has done an abysmal job.” (…) It seems to me [prudent that] we at least begin considering alternatives”

Read the full statement and questioning of John McCain (Rep-Arizona):

Thank you very much, Mr. Chairman, and thank you for holding this hearing and our continued oversight over this incredibly troubled defense program.
This hearing furthers this committee’s obligation to the American taxpayer to ensure that we are training and equipping our fighting men and women in the most fiscally responsible manner possible and that every effort is being made to eliminate waste and unnecessary
costs wherever possible.

Facts JSF Program truly troubling

The facts regarding this program are truly troubling. Originally, the JSF program was supposed to deliver an affordable, highly common, fifth generation aircraft that, by leveraging proven technologies, could be acquired by warfighters in large numbers. Acquiring these jets was supposed to cost a total of $233 billion, or an average of $69 million each, when adjusted for inflation. And the program was supposed to, first, deliver operational aircraft to the services back in 2008.

Price and cost doubled, and counting

None of these promises have come to pass. The program first delivered operational aircraft in 2010. And when the services will get their JSF’s with real combat capability is anyone’s guess. As of today, the total cost to acquire these planes will be at least $385 billion, or an average of $133 million each, and will likely go higher.
Again, I repeat. Originally, they were supposed to be $69 million each. Now they have reached $133 million each and will likely go higher.
The fact is that after almost 10 years in development, 4 years in production, according to outside experts, the aircraft’s design is still not stable. Manufacturing processes still need to improve, and the overall weapons system has not yet been proven to be reliable. Notably, it has taken Lockheed about 10 years and cost the taxpayers $56 billion to produce and deliver 9 of 12 test aircraft. Over that period, Congress has authorized and appropriated funds for 113 F–35 jets. Lockheed has, however, delivered just 11.

Progam now at a watershed moment

In my view, the program is now at a watershed moment. With austere defense budgets for as far as the eye can see, the JSF program must show now it can deliver JSF aircraft as needed on time and on budget.
Since 2009, Secretary gates significantly restructured the program twice, an indication of how serious this program’s problems have become. Those efforts have rightly focused on reducing the risk of trying to develop, test, and procure cutting-edge aircraft that have plagued this program since it started. Cost and schedule changes that accumulated over the last few years resulted in critical breaches of the initial cost thresholds. Put simply, JSF is estimated to cost about 80 percent more than when the program started and about 30 percent more than the current baseline set in 2007. No program should expect to be continued with that kind of track record, especially in our current fiscal climate.

Soon new announcements for cost and production cuts

I understand that soon the Pentagon will announce new baselines for cost and schedule to reflect a total of $7.4 billion in additional funding, a cut of 246 aircraft from the near-term production ramp, and the addition of 33 months to complete development prescribed
by Secretary Gates’ restructuring efforts. As for the future, daunting obstacles remain.

Early production series: cost overruns of 11%-15%

Estimates have the early production (editor’s note: LRIP1 - LRIP2 - LRIP3 series) facing cost overruns of between 11 percent and 15 percent. That is between $700 million and $960 million over the original estimate of $6.4 billion for 28 aircraft. Also, while there has been improvement in decreasing the number of design changes on the manufacturing floor, which tends to be a sign that the design is more stable, such changes are still being done more frequently than desired. And Lockheed Martin still needs to improve how efficiently it moves parts through its manufacturing processes and how it manages its global supply chain.
Additionally, developing the software that is vital to making JSF work as intended is lagging behind schedule. Plus, the new helmet display system that JSF will use is still not on track. Moreover, even after these production problems are solved, we still have to contend with potentially huge costs to maintain all three versions of the JSF. As the chairman mentioned, right now it is estimated to be about $1 trillion, adjusted for inflation. This jaw-dropping amount may be about twice as much as the cost to maintain other roughly comparable aircraft. I appreciate this estimate is still early and subject to change. But we need to know that the program is going to bring that number down.
Finally, I am also keenly aware that the Marines need to start replacing their aging combat aircraft soon, and yet the Marine variant has had the most difficulty in development so far and is facing a 2-year probation after which the Marine version must show improvement
or face cancellation. Of all the services, the Marines face the most drastic consequences of further delays or cost increases due to age of their legacy aircraft.

I look forward to the testimony of all of our witnesses. Thank you, Mr. Chairman.

Questions of Senator John McCain during the SASC Hearing about the F-35 of May 19, 2011:

Question Senator McCain:
I am sure you understand the frustration that members of this committee feel because we have received testimony after testimony over the 10-year period that you are describing that things were going pretty well, that we were pretty well on track, that yes, there were some cost overruns. And in all candor, we had to rely to some degree on the GAO for the facts, and many of us—or at least some of us—saw this train wreck coming which has led me to your comment that right now—is this accurate from what you said? Right now it is not an affordable program and the sustainment costs are not affordable. Is that correct?

Answer Dr. Carter:
That is correct. If we live the estimates, we cannot afford to pay that much. I do not think we have to live those estimates, and our objective is to make sure that those estimates do not come true and that we do have an affordable program.

Question Senator McCain:
It seems to me we have to start at least considering alternatives. If the situation right now is not acceptable, we have to do two things, it seems to me: make it acceptable but also think of alternatives if we cannot do that.
I guess, Dr. Gilmore, did I hear you say the previous plans under your area of supervision were ‘‘not credible’’?

Testing JSF not only “checking design” - high regression factor

Answer Dr. Gilmore (Pentagon Director Operational Test and Evaluation):
Well, first, I advise on developmental testing. My focus is operational testing. So I am not actually responsible for planning the program.
But what I did do, when I first took office, is take a look at the planning factors that were being used. For example, there are planning factors for reflying sorties, test sorties, when you do not get all the information that you originally hoped you would get when
you fly a sortie in the test aircraft. And there are planning factors for what are called regression sorties. That is, you have made a change to the aircraft. For example, they are making changes in the flight control system now in order to deal with something called
transonic wing roll-off, which is an unexpected loss of lift on one wing in the transonic regime where models cannot predict very well what the chaotic air flow is. So you make a change to the flight control system software. You want to go back and refly previous
points you have already flown to make sure you understand the behavior of the aircraft. That is a regression sortie.
The original plans for refly and regression—the original planning factors were 15 percent and 20 percent, 15 percent for refly and 20 percent for regression. Now we stand, as a result of the technical baseline review, at 35 percent and 66 percent. So that is one of the reasons that we now have 14,000 hours in the flight test program as opposed to 8,000 hours before all of the restructuring. That is just one example of assumptions that were made that were clearly out of line with our experience with programs like F–18E/F and F–22. Now, you want to be somewhat aggressive. You do not want to put yourself in a position of inevitably repeating mistakes that were made before, assuming that you will repeat those mistakes. But you can see that those planning factors were well out of line with historical experience.

About the troubling software development

Question Senator McCain:
It is too bad that we cannot, Mr. Chairman, ask those people who made these estimates and made assumptions that were made before this committee to explain that. But probably would be a waste of time.
I do not know if it is Ms. Fox or Mr. Van Buren. According to the GAO, software providing essential JSF capability is not mature and releases to the test program are behind schedule. Is that you, Ms. Fox?

Answer Mrs. Fox (Pentagon CAPE -Cost Estimates):
That is our understanding, sir. The software is behind, yes. (…) Sir, I do not have an answer for what we do. We are absolutely tracking it. I know that the program office is on it. The software development is proving to be much more difficult, as I said, even than CAPE estimated originally.

Answer Dr. Gilmore (Director OT&E):
Senator, one of the reasons that the software is behind schedule—Ms. Fox already mentioned one. It is a hard job to develop all this mission systems software. The mission systems software by source lines of code in Joint Strike Fighter is going to be between two and three times the number of source lines of code in the F–22. So this is a very complex job. We are just beginning.
One of the reasons that the achievement of mission systems flight test test points is behind schedule is because we have right now one dedicated mission systems flight test aircraft. Two or three of the other aircraft can do mission systems testing, but a couple of those aircraft are STOVL aircraft and right now they are being used primarily for STOVL flight sciences testing. There are two additional Air Force variant aircraft that have just been delivered that can do mission systems testing, but they are not going to be able to start doing that for about 4 months because they are going to be used to do what is called a maturity demonstration in order to enable training to start using unmonitored flight later this year down at Eglin.
So the problem is we only have one dedicated mission systems flight test aircraft. In another 4 or 5 months, we will have three, and that may enable us to catch up and drop the next block of software later this year as planned. It is planned in November. According
to my estimates, it may slip a couple of months. But right now, we are limited by test aircraft.

Questions and answers Mr. Michael Sullivan, US Government Accountability Office

Question Senator McCain:
Senator MCCAIN. How long, Mr. Sullivan, have you been tracking this program?

Answer Mr. SULLIVAN (US Government Accountability Office US-GAO):
I have been tracking it on and off for probably 10 years, but solidly for probably the last 6 or 7.

Question Senator MCCAIN:
So, given that experience, what is your degree of optimism that the sustainment costs can be brought under control and the cost overruns can be brought under control? What is your overall assessment of the prospects?

Answer Mr. SULLIVAN (US-GAO):
I think what we have seen from GAO’s perspective is for years what we thought were some fairly significant risks went unaddressed. For example, the Mid- Course Risk Reduction Program that took place in the mid 2000s we thought added more risk. It didn’t reduce risk and, therefore, added more cost to the program.

Question Senator MCCAIN:
And you testified so before this committee?

Answer Mr. SULLIVAN:
Yes, we have. And we made recommendations to the department, beginning in 2001, when we were talking about technology maturity, all the way through until—I mean, we made many recommendations that they should reduce their ramp-up rate because they weren’t ready to go to production.
Now all these things have come to pass, and they have come home to pass probably more inefficiently than if it would have been planned better in the first place.
But I would say with the beginning of the Nunn-McCurdy breach, when we had the Nunn-McCurdy breach and they came in and did the analysis, I think that they have done a pretty good job of being a lot more candid. They have got a lot more actual data
to bring into it now. Now, of course, it resulted in yet again another pretty significant cost increase, both to RDT&E costs and procurement costs, and significant schedule delays. But I think what we got in the last 15 months with this review that has gone on, and I think what Admiral Venlet referred to, is we have got a lot more sense of the systems
engineering knowledge that we need. And I think we have reduced risk a lot, and they have an estimate now that at least it is an estimate.

Question Senator MCCAIN:
Again, given your long experience, would you believe that perhaps at least alternatives need to be considered?

Answer Mr. SULLIVAN.
I think alternatives should always be considered. That is a little bit out of my, you know, my bailiwick. But yes, I think it is reasonable to assume that alternatives should always be considered, especially for our National security interests.

Lockheed Martin’s Tom Burbage under fire

Question Senator MCCAIN:
Mr. Burbage, Mr. Sullivan has just testified that they alerted the Congress and, I am sure, you of these significant risks, which, Mr. Sullivan’s testimony, were unaddressed for
8 or 9 years. What is your response to that?

Answer Mr. BURBAGE (Lockheed Martin):
Well, sir, the process on this program is complex. It is challenging. We have lots of independent looks at the program. We try to accommodate those independent looks as we can within the constraints that we operate in, and those are annual budgets and annual schedule constraints. Can we accommodate all of them? No.

Interruption Senator MCCAIN:
Annual budgets? You have exceeded your annual budgets by almost double.

Answer Mr. BURBAGE:
Well, sir, we have a set of requirements we are designing the airplane to meet. We mature that design as we go forward in time. We then bring the design into production. We then test the design. We don’t have full knowledge of how that is going to unfold. And
as it unfolds over time, we accommodate the different risks and challenges that come up.
Now the contract geometry is established upfront to accommodate the fact that there will be unknowns in this process, and we work our way through those.

Question Senator MCCAIN:
You know, but the sad part about that is that we sit here, and contractor and Department of Defense come over and tells us this is how much it is going to cost your taxpayers. And consistently—this isn’t unique—we find cost overruns with no
incentives to bring those cost overruns under control because they are ‘‘cost-plus contracts.’’ Nowhere in our economy do we have costplus contracts except in Defense, that I know of.
And yet Lockheed Martin is doing pretty well. Do you recall what their profits were in 2010?

Answer Mr. BURBAGE:
No, sir. I don’t.

Question Senator MCCAIN:
Probably, maybe you could submit it for the record? But I know that there has been a handsome return to the shareholders, but there hasn’t been a handsome return to the taxpayers. And if I convey a sense of frustration, it is because I have been a member of this committee, and I at least initially accepted the testimony of the Department of Defense and the program managers.
And consistently, the GAO has come forward with testimony saying that would contradict that, and now we find ourselves in a situation where previous witnesses say that sustainment costs are unacceptable, and the present rate, the weapon system is not affordable.
So I guess my question is, is that when you entered into the original contract with DOD, did you anticipate these kinds of cost overruns, breach of Nunn-McCurdy?

Answer Mr. BURBAGE:
No, sir.

Questions and answers Admiral Venlet, JSF Program Office

Question Senator MCCAIN.
Admiral, since the 2-year extensive review of the programs over the JSF has estimated it cost about 80 percent more than when the program started about 10 years ago, what can you tell the committee to give us confidence that the unsustainable cost growth we have seen in the program is now ending?

Answer Admiral VENLET (JPO):
Sir, the cost position in the situation of the program and Nunn-McCurdy was judged to be, as you said, 80 percent higher. That was on a path that was failed, basically. It did not have the realism in it. That is why the cost to bring this capability to bear was underplanned, both in content and in how it was estimated to be in price.
The hope for discipline going forward is it was a very serious commitment by the Defense Department to commit these resources of this extra $4.6 billion, not an easy thing, not taken lightly. Very seriously understood by me, when I brought that recommendation
forward. And I told Dr. Carter that it was my estimation that this change and this adjustment to the program had an ability to absorb the learning that remains and the number of flight tests and the years of continued development that should because of that grounding in realism and refly rates, capacity to do software, resource the helmet
issues that have been discussed, would have a high confidence of delivering within that timeframe and within that dollar amount.
Now it is not a given that it will. It requires to deliver particularly in the software area. From today, from the day I got here until the day the program declares its development complete, software will be the highest risk and the most intense focus of the program.
In parallel with this resourced and planned with realism, and it must come, the cultural change to never lose that grasp on the systems engineering processes. If we stray from that, we will go back to the old ways, and we will not live to this plan. That is a determination that those here and those that follow us must not lose to deliver this program.

About the doubled Operating and Support Cost

Question Senator MCCAIN:
I just have two more quick questions, Admiral. One of them is why are the sustainment costs for this system so much higher than others, and what can be done about that?

Answer Admiral VENLET:
Yes, sir. In the sustainment costs, the striking estimate that we are facing right now is a buildup of factors that what we believe today about the size of the manpower that will be required to sustain this aircraft, the number that we will own, the number of hours per month that we will fly them, which goes into the fuel cost, the price of the aircraft drives the estimated— (Interruption Senator MCCAIN. The price of fuel is the same for every aircraft.) - Yes, sir. Yes, sir. But the size of the fleet— 2,400 of these would be more than the F–18 fleet, the F–15 fleet.

Question Senator MCCAIN.
So you are saying that the F–18 sustainment costs are less because there are fewer of them?

Answer Admiral VENLET:
Only one factor, sir. Now I am going to complete the factors that are in the estimate now. My duty for the service chiefs and the Secretaries are to illuminate them the consequences of those choices.
So how many that we have, where we bed them down, how many bases, how many support equipment sets, simulators that we need, the number of maintenance technicians we believe are going to be required.
My focus this year, if 2010 was the year we focused on the development program and the manufacturing plan, this is the year we were focusing on needs estimates and these parameters, and I need to illuminate for those leaders what those drivers are and then bring them forward, bring forward to them some choices to make to make those go down.

Question Senator MCCAIN.
Well, I would have hoped that since we are in the 10th year of this program that some of those decisions would have been made a long time ago.
My final question is what degree of confidence do you have that the Marine Corps version can get off probation?

Answer Admiral VENLET.
Sir, I have high confidence that the Marine Corps STOVL will succeed this period of scrutiny. Every technical issue—and they are principally the propulsion system integration,
the ones that Dr. Carter spoke of. Every issue within our view today has an engineering solution to lead the STOVL to the air worthy, flight clearance for unmonitored operation by the fleet. I have high confidence that we will get the STOVL to its initial sea trials before the end of this year. I have high confidence that we will be able to achieve a flight clearance from the Naval Air Systems Command for a conventional monitored mode of flight first while we prove out the engineering solutions I spoke about for the STOVL mode, and that will help the Commandant immensely, sir.

Senator MCCAIN.
Thank you. I thank the witnesses for their patience.

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