CORRECTED JSF OVERRUN TO $1.5B. WE ADDED A ZERO…

CAPITOL HILL: The budget cuts known as sequestration would “break” the KC-46 and Littoral Combat Ship contracts, forcing the Pentagon to renegotiate those deals, the presumptive head of DoD acquisition told the Senate Armed Services Committee today.

The statement, by Frank Kendall, currently acting undersecretary of defense for acquisition, technology and logistics, was the first concrete information about how the cuts, forced by the Budget Control Act, would affect Pentagon acquisition.

Kendall also told the Senate Armed Services Committee during his nomination hearing that weapons programs that go over budget are more likely to get killed because of the Pentagon’s tighter budget. He also pledged to do as much as possible to keep costs under control on all weapons systems. In a pointed signal to industry, he told the committee that “one of my first acts” on becoming acting head of acquisition was to cancel the Ground Mobile Radio version of JTRS when it went significantly over budget.

Just how badly do Pentagon systems fare when it comes to costs? The SASC questions for Kendall, which are drafted by staff and are answered before the nomination hearing, says that “nearly half” of all Pentagon weapons systems incur Nunn-NcCurdy breaches. That means they go over budget at least 15 percent and the Pentagon must tell Congress when that happens.

In a remark sure to dog him during his tenure as head of Pentagon acquisition, Kendall told the Senate’s defense policy committee that the last 50 years of military acquisition left him to conclude: “I am not confident any defense program will not have cost overruns.” Aside from the double negative, which softens it somewhat, Kendall basically admitted that the Pentagon has done such a poor job of managing weapons systems that no reasonable person could pledge any one weapon system won’t suffer cost overruns.

On the F-35, he confirmed to the committee for the first time that the Joint Strike Fighter has incurred cost overruns of roughly $1.5 billion so far, a number sure to infuriate critics such as Sen. John McCain. Kendall also said he had “set a cap” on sustainment costs — which, surprise, are “too high” — and on production costs. At the end of the hearing Kendall did not offer any details about where he set the cap or how, but you can be sure it will bring the program’s cost below the infamous $1 trillion estimate for the plane’s 50-year life.