The Pentagon has announced that cost overruns and delays in testing and production run-up are forcing it to cut the number of F-35 Lightning II aircraft procured for the money that has been allotted for the program.
10 aircraft will be cut from 2011 procurement. 122 aircraft will be cut from the production run by 2015. That's equivalent to cutting 10 Navy or Marine squadron's worth of aircraft.
This is due completely to cost overruns. $2,800,000,000 from production funding is being redirected to helping complete the flight testing process, because it has taken so long and has found so many problems that need to be addressed.
This is another example of the lunacy of Pentagon procurement contracts, that place the monetary responsibility of cost overruns, for any reason, back on the government (taxpayer). No matter the cause, even if it is negligence on the contractor's part, the taxpayer foots the bill. In the case of the F-35, it will result in a significant reduction in the number of aircraft built for our services - aircraft desperately needed to overcome the shortfall of combat aircraft we are in the middle of (a shortfall that will get increasingly worse as this new decade moves forward). The F-35 was supposed to fill this 'fighter gap' and bring our military back up to strength - instead, the number is being cut before full scale production even begins.
Contractors generally have little or no reason to avoid cost overruns, since they are passed on. Until the Pentagon starts signing contracts that hold contractors to a fixed cost, this is going to repeat itself. I know of no military procurement contract that has been delivered on time, on cost in modern history - surely there are some, but they are so small as to be unnoticed. Contractors have every incentive to undercut their competition cost wise during the bidding process, knowing that they will be able to make it up later on - and that they will face no punishment.
