It’s Never Black Friday at the D-O-D

When does DoD get to cross from red to black? It is not the day after Thanksgiving (Can you believe Old Navy opens 3 am? Hey, that’s an hour after the bars close and an hour before Sears opens, so one could start with the Macy’s Thanksgiving Day Parade on Thursday and run right through to Friday night.)
But we digress. Though parallel accounting lines never cross, DoD is making a half-hearted run for the black.

The Defense Department has said that aircraft bad boy Lockheed Martin must pony up a portion of cost overruns plaguing the big-bucks, multi-service, multi-nation F-35 joint strike fighterThe aircraft reportedly has fallen so far behind schedule, defense officials have estimated it would cost an extra $16 billion to get the program back where it needs to be. Currently more than 2,400 aircraft are planned to outfit the U.S. Air Force, Navy and Marine Corps. That does not include those for U.S. “partners” around the world.

Despite Lockheed’s missteps, DoD officials say they are prepared to plow another $200 million (deficit) dollars into the F-35 program to encourage … we’re not sure what. It has been reported the Pentagon also may add additional aircraft in an effort to get Lockheed to hire more software engineers—to keep the program moving. We speculate the move could be an effort to ensure at least one plane will roll off the production line someday, unlike the presidential helicopter or a number of Army programs that have been killed taking billions to their gold-lined graves.

So spend more money to get a better response from the contractor? That’s how we’re reading it. This seems an odd client-contractor relationship. A contract is a contract, be it fixed-price or otherwise. Lockheed’s behavior lies in the terms of the contract, and probably isn’t impacted significantly by DoD’s efforts to show its “commitment” to the F-35 at this point. The belief that “we’re all in this together” may have been possible during World War II, but this is a global economy, and the defense giants sell to just about anyone within the law.

The world is waiting on this aircraft and reports have been published by concerned foreign customers about the cost overruns and production slowdowns. The Government Accountability Office reported last year that the F-35 program could top $1 trillion: $300 billion for the aircraft and more than $700 billion in lifetime maintenance.

When will DoD, or one of its programs, have a Black Friday?

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