U.S. GAO sees $11.5 bln drop in acquisition cost of Lockheed F-35

Mon Mar 31, 2014 8:29pm EDT
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WASHINGTON, March 31 (Reuters) - The estimated acquisition cost of Lockheed Martin Corp's F-35 fighter jet program dropped $11.5 billion over the past year, the congressional Government Accountability Office reported Monday in its annual report on U.S. arms programs.

The congressional watchdog agency said it now estimates the Pentagon will spend $332.3 billion over coming decades to develop the new radar-evading F-35 jet and buy a total of 2,457 aircraft, about 3.3 percent less than last year's estimate.

The new estimate was provided in fiscal year 2014 dollars.

The U.S. Defense Department's current estimate for the cost of developing and buying the F-35 is $392 billion, measured in 2012 dollars, although that projection may change when the Pentagon releases its own updated annual report on the acquisition costs of major weapons programs in mid-April.

It was not immediately clear why the GAO's estimate for the acquisition cost of the Pentagon's biggest weapons program is so much lower than the government's own projection, and GAO officials were not immediately available to comment.

Lockheed is developing three models of the F-35 for the U.S. military and eight countries that helped fund its development: Britain, Australia, Canada, Denmark, Norway, Turkey, Italy and the Netherlands.

Israel and Japan have also placed orders, and South Korea this month said it also planned to buy the jet. Pratt & Whitney, a unit of United Technologies Corp, builds the single engine that powers for the new warplane.

The GAO's annual report on the 80 biggest U.S. weapons programs said the reduction in the estimated cost of the F-35 program was due "solely to efficiencies found within the program" since there was no decrease in quantities.

The F-35 program was one of 50 major weapons programs that saw costs go down a combined $31 billion in 2013, the GAO report said. It said the remaining 30 weapons programs reported higher combined cost increases of $43.5 billion.   Continued...