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08 Apr 05. Demetri Sevastopulo in Washington of the Ft reported that the Joint Strike Fighter could cost $5bn more to develop than previously estimated, raising the prospect of additional scrutiny from lawmakers concerned about the spiralling costs of military systems.

The JSF programme – three versions of a Lockheed Martin fighter jet that will be used by the US air force, navy and marines, as well as allies, including the UK – is already slated to cost over $200bn, making it the most expensive procurement in history. Last year, the Pentagon raised the estimated development costs by $7.5bn to $40.5bn, after it emerged that the vertical take-offversion of the jet wanted by the US marines and the UK navy, was too heavy to perform vertical lift-off. Gordon England, the secretary of the Navy who has been nominated to become deputy defence secretary, on Wednesday was quoted by the Fort Worth Star Telegram as saying the companies building the JSF had resolved previous technical difficulties, including the weight problem.

But now, signalling potential further cost overruns, the Cost Analysis Improvement Group [CAIG], an internal Pentagon analysis group, is preparing a report that estimates that development costs will rise a further $2-5bn, according to several sources with knowledge of the analysis.

“The programme office usually takes a more optimistic attitude towards what cost will be than CAIG, who rely mainly on historical data,” said one industry source. “The CAIG is saying $2-5bn more through the end of development than the programme office is.” CAIG is expected to submit its assessment to the Defence Acquisitions Board, which will meet on May 5 to evaluate the JSF programme.

Tom Jurkowsky, a Lockheed Martin spokesman, said the company was not aware of any cost overruns, saying the acquisitions board would have to consider many assessments of the JSF programme, including some from Lockheed.But one former senior official said CAIG is “very highly regarded” and has been taken increasingly seriously in recent years by Pentagon acquisition chiefs.

“They are the true arbiters of cost in the department,” he said. CAIG played a significant role in raising cost concerns about the now defunct $23.5bn Boeing deal to provide the air force with refuelling tankers. Congress cancelled the contract last year following a protracted investigation by John McCain, a senior Republican senator who wants the Pentagon to tighten the military acquisitions process to protect taxpayers, and revelations that a former air force official had boosted the price of the contract to benefit Boeing.

According to one former government official, the Pentagon analysts are concerned about costs to make sure the fighter jets would be
“tamper proof” so that US allies who buy the planes could not reverse engineer some of the technology onboard. But other sources questioned whether that could amount to $5bn, saying weight issues and integrating computer systems were the most likely cause.

“Given a $40.5bn non-recurring bill, [an additional]$2-5bn sounds about right,” said Richard Aboulafia, analyst at the Teal group. “You have got to knock a few thousand pounds out of it. That means design changes, and design changes aren’t free.” James Roche, who resigned as air force secretary earlier this year, said he was not surprised to learn about cost overruns on the JSF. Mr Roche championed the rival super stealth F/A-22 Raptor jet, also being made by Lockheed, which saw deep cuts in the recent proposed Pentagon budget for 2006. Donald Rumsfeld rebuffed efforts by the air force to ask for fewer JSF in an attempt to save money for the Raptor programme.

“I have openly predicted a rise in JSF costs for three years, and a major set of schedule delays,” said Mr Roche. “No one believed me. Yet another reason for me to press to fix the FA-22 which I did!!”Marvin Sambur, who as Mr Roche

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