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NEWS IN BRIEF – USA

17 Apr 14. The Pentagon on Thursday forecast the cost of developing and buying Lockheed Martin Corp’s F-35 fighter jet at $398.6bn, up 2 percent from last year, but said the projected cost to operate and maintain the jets was down about 9 percent. The total cost of the F-35 Joint Strike Fighter, the Pentagon’s costliest weapons program, is now seen at $1.42trn, down about 6 percent from $1.50trn, including research, development, procurement and operations through 2065. Air Force Lieutenant General Chris Bogdan said the higher acquisition cost was mainly due to postponed orders by the U.S. military and some allies. But he said he was unhappy about a $4.3bn increase in costs on the plane’s engine, which is built by Pratt & Whitney, a unit of United Technologies Corp. Bogdan told reporters that growing demand for the new fighter jet would drive procurement costs lower in coming years, citing potential orders from South Korea, Israel, and Singapore. But he said the Pentagon’s F-35 program office continued to work closely with Lockheed and Pratt to drive down the cost of building, flying and maintaining the plane. The Pentagon report estimated the total “lifecycle” cost of the U.S. F-35 fleet at $1.02trn, including inflation, down from $1.11trn a year earlier, but the F-35 program office said improving reliability and other adjustments meant the number would be closer to $917bn. Bogdan said the huge fighter jet program was making steady progress, but there was more hard work to do to complete flight testing, which is about 55 percent complete, drive down costs and start assembling planes in Italy and Japan. “I’m pretty pleased,” he said. “But there’s a lot of work to go. We’re still in the catch-up phase.” Lockheed is building three F-35 models for the United States and eight countries that paid for its development: Britain, the Netherlands, Canada, Australia, Norway, Denmark, Turkey and Italy. The program’s cost is 70 percent over initial estimates, but costs have stabilized since a major restructuring in 2012. The latest report estimated the average procurement cost of the F-35 would be $138.9m in then-year dollars, or $162.2m, including the cost of research and development. Bogdan said Pratt was spreading its overhead costs over a smaller base, given a dip in its commercial bases, and said the company needed to adjust more quickly to the altered market. Lockheed spokesman Michael Rein said the new report showed a significant reduction measured in 2012 dollars, the second consecutive year that costs had come down, but the company remained committed to further cost reductions. “We are confident that as the program continues to grow and mature costs will continue to decrease,” he said. Pratt said it had an aggressive cost-cutting program in place and was continuing to pursue reductions in its supply chain, manufacturing process and overhead rates. (Source: Reuters)

17 Apr 14. DDTC Corrects Recent Amendment of ITAR ยง 126.17 US/UK Defence Trade Cooperation Treaty Licensing Exemption. (79 Fed. Reg. 21616) – On February 11, 2014 (79 Fed. Reg. 8082), the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) amended the International Traffic in Arms Regulations (ITAR) to, among other things, update the text of the licensing exemption created pursuant to the Treaty Between the Government of the United States of America and the Government of the United Kingdom Concerning Defense Trade Cooperation, at ITAR Sec. 126.17, so that it is a clearer representation of treaty requirements and is also consistent with ITAR Sec. 126.16 (the Australia defense trade treaty exemption). As a result of an error in amendatory instruction, ITAR Sec. 126.17(o)(2)(i) through (iv) were removed. This amendment restores those paragraphs. (Source: glstrade.com)

17 Apr 14. DDTC Amends ITAR Part 126 to Reflect Recent UN Security Council Resolutions on the Central African Republic. (79 Fed. Reg. 21616) – The U.S. Department of State’s Directora

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