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Think Progress, July 9th, 2014: Just days before its international debut at an airshow in the United Kingdom, the entire fleet of the Pentagon’s next generation fighter plane — known as the F-35 II Lightning, or the Joint Strike Fighter — has been grounded, highlighting just what a boondoggle the project has been. With the vast amounts spent so far on the aircraft, the United States could have worked wonders, including providing every homeless person in the U.S. a $600,000 home. Continue Reading…

Milwaukee Journal Sentinel, July 2nd, 2014: Every community should have sustainable, long-term, good jobs now and for the future [including] areas that have had an economy highly dependent on defense contracts. Continue Reading…

New York Times, July 4th, 2014: The grounding is the second in a month and the latest in a long string of delays that has plagued the Air Force’s newest fighter aircraft. It comes as the plane was to make its international flying debut during showings to prospective buyers at two air shows in Britain beginning next week. Continue Reading…

Carter: JSF Program Manager Based F-35 Award Fees On Desire To Protect Lockheed Exec

Posted on InsideDefense.com: May 30, 2014

A former Joint Strike Fighter program executive officer was fired in 2010 after explaining that he based the government’s decision to award prime contractor Lockheed Martin 85 percent of the potential award fee — when the F-35 program was suffering from major cost growth and schedule delays — on his desire to protect the job of his Lockheed counterpart, according to a former senior Pentagon official.

Ashton Carter, deputy defense secretary from 2011 to 2013, on May 16 provided a Harvard University audience a behind-the-scenes account of his efforts in 2009, during his first year as Pentagon acquisition executive, to understand why projected costs for the F-35 aircraft had doubled and why the program was facing schedule delays.

At the time, an independent cost estimating team was advising Pentagon leaders that the true cost to develop and procure the planned F-35 fleet would be billions of dollars more than the JSF program office estimated, foreshadowing a $60 billion increase to the F-35′s official price tag.

Carter said he called in the program manager, whom he does not name during his remarks. At that time, Marine Corps Maj. Gen. David Heinz had recently become the F-35 program manager, in April 2009. His predecessor, from 2006 to 2009, was Air Force Maj. Gen. Charles Davis, now a three-star general and the military deputy to the Air Force acquisition executive.

“I want to see the bill, everything that goes into the cost of this airplane,” Carter said, in a video of his remarks posted on YouTube <https://www.youtube.com/watch?v=TUVKV9eaQy8&feature=youtu.be&t=20m21s>  on May 22. “The program office didn’t know, could not tell me where the money was going.”

At that time, the F-35′s development was being executed under a cost-plus contract, a vehicle that allows a contractor to pass costs on to the government in addition to seeking an award fee. “I asked the program manager: ‘Let me see your award fee history.’ I look at the award fee history over 10 years, it is 85 percent a year,” Carter said.

The former deputy defense secretary said he told the program manager the F-35 program was “a disaster,” adding, “You’re giving an 85 percent award fee every year, what’s going on?”

“And,” Carter continued, “he looked me in the eye . . . and said: ‘I like the program manager on the Lockheed Martin side that I work with and he tells me that if he gets less than 85 percent award fee, he’s going to get fired.’”

“So, this guy was fired,” Carter said of Heinz. Then-Defense Secretary Robert Gates announced Heinz’s dismissal during a February 1, 2010, press conference.

Carter subsequently ordered a sweeping technical review of the JSF program and transitioned it to a fixed-price contract in an effort to force Lockheed to shoulder a portion of the costs associated with developmental risks.

“We began a process that was very difficult: to re-educate the Air Force-Navy team that managed this important aircraft so that they knew what the hell they were paying for,” Carter said in the Harvard speech. “They had no idea.”

In 2013, the Pentagon restructured the award-fee scheme for the Joint Strike Fighter program, setting aside $337 million that Lockheed Martin could earn by achieving specified goals during the balance of the aircraft’s development phase.

Air Force Lt. Gen. Christopher Bogdan, the current F-35 program executive officer, told the Senate Armed Services tactical air and land forces subcommittee on April 24, 2013, that a portion of the remaining award fees Lockheed could earn would be tied to the timely delivery of planned aircraft complete with scheduled software and capability improvements. The bulk of the remaining fee is tethered to achieving the current aircraft development plan on time and budget, he said (DefenseAlert, April 24, 2013).

Jason Sherman

InsideDefense.com,  May 30th, 2014: “The program office could not tell me where the money was going….I asked the program manager: “You’re giving an 85 percent award fee every year, what’s going on? And he looked me in the eye . . . and said: ‘I like the program manager on the Lockheed Martin side that I work with and he tells me that if he gets less than 85 percent award fee, he’s going to get fired.’” Continue Reading…

Truthout, March 20th, 2014: the problem is not scarcity of money.  The problem is how it is being spent.  We are getting very little defense–training, maintenance, hardware, and troops–for a gigantic amount of money. Continue Reading…

Foreign Policy, February 14th, 2014: For years, the [Joint Chiefs of Staff] had pre-arranged with high-spending members of the Senate and House Armed Services Committees to be asked at hearings to submit lists of programs for extra spending. … I often listened to Armed Services Committee staffers boast about how they could supplant defense budgets — defying the president, OMB, and even DOD — with the help of eager members of the JCS. Continue Reading…

DefenseOne, January 22nd, 2014: Lockheed Martin has exaggerated the number of jobs associated with the F-35 by a factor of two….over half of the jobs in just two states, Texas and California. And large portions of the aircraft will be built overseas. In short, there just aren’t enough F-35 jobs in enough key locations to make the jobs argument a decisive factor in funding decisions about the plane. Continue Reading…

Boston Globe, January 5th, 2014: The automatic federal budget cuts Congress imposed in early 2013 raised hopes in some quarters that the Pentagon’s spending juggernaut, long criticized as bloated and wasteful, finally would be curtailed. Those expectations may prove fleeting. Continue Reading…

This three-part series from Reuters shows that the Pentagon cannot accurately track what it spends; that Pentagon employees routinely fake the numbers in order to balance the books; that the Pentagon has spent over $8 billion on new accounting systems that don’t work; and that soldiers are among the ones who suffer when their paychecks are wrong. Read the series here.

War Is Boring, December 16th, 2013: the Pentagon has little idea where billions of taxpayer dollars are going. The five-sided building is awash in corruption and claims that an audit is impossible. Continue Reading…

McClatchy, November 22d, 2013: “The unchecked and wasteful spending at the Pentagon has been well-documented, starting when I uncovered $700 toilet seats,” said Sen. Chuck Grassley, an Iowa Republican who has chronicled profligate Pentagon spending for years. “Attempts to steer the ship in the right direction is a massive undertaking that can only be done with a competent inspector general willing to be a junkyard dog and not afraid to knock some heads.” Continue Reading…

Politico, October 17th, 2013: The heads of the world’s largest defense companies are working to reclaim their clout in Congress after failing to push lawmakers to tackle sequestration as part of an agreement to end the latest standoff….even defense hawks, many of them worried about being challenged in primaries from the right, are determined to keep the cuts in place — unless there’s a deal to replace them by reining in entitlement programs. Continue Reading…

Huffington Post, October 4th, 2013: Now seems like an ideal time to turn the attention to the $716 billion elephant in the room. If we are going to shutdown non-essentials in our country, let us start by shutting down the waste and fraud in our military budget. Continue Reading…

Foreign Policy, July 27th, 2013: 42 percent of the defense budget is spent on overhead. Some overhead is clearly needed for every enterprise, including the military. But 42 percent? No private sector business, non-profit, or public charity would survive for long with an overhead rate even 20 percentage points lower than that. Continue Reading…

Washington Post, July 23rd, 2013: ….analysts said they’re not surprised that defense contractors’ earnings are holding up. Many contracts are booked years in advance and it will take time, analysts cautioned, for the spending cuts to show up in companies’ bottom lines. Defense contractors “overhyped the immediacy of the sequester impacts, and I think that blew some if not all of their credibility.” Continue Reading…

Global Research, February 4th, 2013: Prisoners earning 23 cents an hour in U.S. federal prisons are manufacturing high-tech electronic components for Patriot Advanced Capability 3 missiles, launchers for TOW (Tube-launched, Optically tracked, Wire-guided) anti-tank missiles, and other guided missile systems. Continue Reading…

Time, February 25th, 2013: The F-35 is a poster child for Pentagon profligacy in a new era of tightening budgets. Continue Reading…

Time, February 25th, 2013: “We are spending maybe 45% of the world’s budget on defense. If we drop to 42% or 43%, would we be suddenly in danger of some kind of invasion?” asked Representative Justin Amash, a Michigan Republican and part of a new breed of deficit hawks who talk of spending as a bigger threat than war. “We’re bankrupting our country, and it’s going to put us in danger.” Continue Reading…

New York Post, February 14th, 2013: [Sequestration] trims not just fat, but muscle and bone, too. It’s going to be ugly. But as I’ve watched the Defense Department pull shameful stunts and listened to congressional blather attempting to block sequestration, this defense hawk has become one irate taxpayer. Continue Reading…

US News, January 16th, 2013: Cutting the defense budget absolutely can be done. In fact, it must be done. Continue Reading…

Huffington Post, January 3rd, 2013: The first step in a national security reassessment might have been a meaningful examination of national priorities, matching strategies, and whether there are necessary resources to fulfill either.  Continue Reading…

Public Accountability Initiative, December 19th, 2012: How the “Fix the Debt” Budget Lobby is Protecting Billions in Defense Contracts for its Corporate Backers. Continue Reading…

Defense Department Prepares Plans for Sequestration, American Forces Press Service, December 5th, 2012

Fiscal Cliff Offers Hint at More Defense Cuts, AP, December 5th, 2012: even the fiercest defense hawks acknowledge that the Pentagon faces another financial hit.

Toss Wasteful Defense Weapons Programs Off the Cliff, Rep. Barbara Lee, Huffington Post blog, December 5th, 2012: no serious plan to address the deficit can go forward without defense spending reforms on the table.

Former Defense Officials Call For Military Spending Cuts, Think Progress, December 5th, 2012: In previous eras, increased defense spending may have been required to maintain security. That is no longer the case.

Defense industry acknowledges likelihood of Pentagon budget cuts, Washington Post, December 4th, 2012: some defense industry executives have begun to acknowledge that avoiding significant cuts to weapons programs may be impossible over the long term.

Program on Government Oversight, November 15th, 2012: Not everyone may agree with everything [Sen. Tom] Coburn recommends should be cut, but there are certainly some doozies in the report, including: An app that lets you know when it’s time for a coffee break; Research which found that “Fish could show the nation how to overcome political polarization and promote democracy;” $1.5 million for a Pentagon project “to develop its own brand of jerky treats that are the bomb!”

 

Government Executive, October 5th, 2012: Boeing Co., General Dynamics and other contractors will not send their employees layoff warnings in November in anticipation of lost government contracts resulting from sequestration. Continue Reading…

Time Battleland Blog, October 2nd, 2012: The most prominent effect of a major increase of money in the defense budget since 2001 has been decay in our forces. It has consisted of fewer combat units (such as Air Force squadrons and battleforce ships), aging of our major weapons inventories, and declining readiness of fighting personnel, such as pilots and tank drivers. Continue Reading…

Time Battleland blog, October 5th, 2012: The Navy’s new Littoral Combat Ship (LCS) is not only staggeringly overpriced and chronically unreliable but – even if it were to work perfectly – cannot match the combat power of similar sized foreign warships costing only a fraction as much. Continue Reading…

POGO, September 21st, 2012: This week another major defense contractor used its employees as political pawns in its campaign to halt planned reductions in Pentagon spending. Continue Reading…

Program on Government Oversight, August 6th, 2012: Lockheed Martin chief executive Robert Stevens has said….that sequestration would lead to “personnel reductions that would severely impact advanced manufacturing.” But Lockheed was awarded $10.4 billion more by the government for 2011 than for 2006 (a 32 percent increase), and at the end of 2011 it employed 17,000 fewer employees than in 2006 (a 12 percent decrease). Continue Reading…



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