Senate delays F-35 funding for a year

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boff180

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Unread post24 Jun 2006, 08:22

Senate votes to delay F-35
By Tony Capaccio, Bloomberg News

The U.S. Senate passed a $517.7 billion defense spending measure Thursday that would delay initial production of the first F-35 joint strike fighters by a year while restoring a backup engine for the plane that the Pentagon wanted to kill.

By a vote of 96-0, the Senate passed legislation that authorizes fiscal 2007 military spending. The measure cuts $1.2 billion the Pentagon wanted that would enable Lockheed Martin to begin building the first 21 production F-35s.

The spending cut, which would have to be agreed to by the House, would delay production for one year to allow for more development and flight testing.

The bill includes $50 billion more for the wars in Iraq and Afghanistan and would bring total spending in the war on terrorism to about $487 billion since the 9-11 attacks, according to the nonpartisan Congressional Research Service.

Without the $50 billion, the budget represents a 4.1 percent increase over spending approved for this year, which includes defense programs within the Energy Department, military construction, operations and maintenance, and weapons purchases. It's about 1 percent more than the Pentagon requested. The Senate approved a 2.2 percent pay raise for all military personnel effective Jan. 1, with additional raises for midcareer and senior enlisted personnel and warrant officers effective April 1, 2007.

The Senate authorized $85.9 billion to buy weapons, or about $3 billion more than the Pentagon sought. The Senate also approved spending $74.2 billion on weapons research and development, $1 billion more than requested.

A report accompanying the bill cited the joint strike fighter program for "excessive" overlap between its testing and production phases. The JSF program, the most costly defense project ever, is now projected to cost $276 billion. Lockheed is the prime contractor on the F-35 and plans to build the airplanes at its west Fort Worth assembly plant.

Inadequate testing "has proven to be risky in past programs like the F-22A fighter, Comanche helicopter and B-2A bomber, which far exceeded the cost and delivery goals set at the start of their development," the report said. It said the F-35 program already is plagued by cost overruns and delays. In its version of the annual defense bill, the House cut $241 million from the program. The two chambers must negotiate this difference in crafting a compromise authorization measure.

Lockheed and Pentagon officials hope to persuade Congress to fully fund the F-35 program, saying delays will drive up costs.

"Only time and the process will tell us what will end up in the final FY-07 defense budget," Lockheed spokesman John Smith said.

The Senate joined the House in rejecting a Pentagon request to terminate a backup engine for the F-35 produced by Rolls-Royce Group-General Electric for a savings of about $1 billion.

In a separate move, the Senate reversed a Pentagon decision to cap its purchase of Boeing C-17 transport planes. The company said that would force the closure of its Long Beach, Calif., plant in 2008, and the Pentagon budgeted $657 million to allow for that. The Senate used that money instead to buy two more planes. The House added money for three more transports.

On weapons-buying policy, the Senate approved an initiative whereby U.S. military contractors would assume greater responsibility for cost overruns. Only "fixed-price" contracts would be awarded for development work, except in cases deemed too "complex and technologically challenging" by the Pentagon.

The Senate action, if enacted, would reverse 17 years of procurement policy under which Congress virtually prohibited the use of fixed-price contracts in development programs in favor of "cost-plus" awards requiring the government to shoulder most of the cost overruns. The House bill doesn't have the provision.

The Senate measure contains good news for Lockheed's F-22A program as it allows the Air Force to sign a three-year, $7 billion umbrella contract to buy the final 60 F-22A fighters in the 183-plane program.

The Armed Services Committee wanted the service to sign three one-year contracts which Congress might refuse to finance in subsequent budgets. The Senate rejected the committee's directive, voting 70-28 for an amendment sponsored by Republican Saxby Chambliss of Georgia, where the plane is assembled.

Air Force officials say the three-year contract will save up to $250 million over buying the aircraft on an annual basis. The House in its version allows the three-year contract to proceed.

"This measure will save the taxpayer a quarter of a billion dollars by stabilizing the F-22 program in a way that allows the Air Force and the contractor to better manage risks," Chambliss said.

Staff writer Bob Cox contributed to this report.

Source: Bloomberg News
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djcross

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Unread post25 Jun 2006, 02:19

The FY07 F-35 budget is not a "done deal" until after the Senate and House of Representatives conference committee meets. House provided budget, Senate did not, the compromise will be somewhere in the middle. Its one of the quirks of how the American budget process works.

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