Tuesday, December 13, 2011

Top Senators Express Dismay Over Latest F-35 Deal

The 2012 U.S. defense authorization bill includes tighter cost controls for the next F-35 Joint Strike Fighter (JSF) purchase, but the legislation comes too late to influence a contract the Defense Department awarded days earlier.
SENS. CARL LEVIN, left, and John McCain both were unhappy with the Pentagon’s latest F-35 purchase from Lockheed Martin. (File photo / Getty Images)
The Pentagon announced Dec. 9 thatit had awarded Lockheed Martin a $4 billion contract to build the fifth low-rate production lot of 30 F-35s for the Air Force, Navy and Marine Corps.
That happened as lawmakers from the House and Senate were negotiating the final language for the 2012 defense authorization bill, including a Senate amendment that would have prohibited the use of a cost-plus contract for lot 5.
Those negotiations concluded Dec. 12 and the legislation could be voted on in the House as early as Dec. 14, according to House Armed Services Committee Chairman Rep. Buck McKeon, R-Calif.
The authorization bill no longer contains language on the Lot 5 buy, but it now calls for a "no cost-plus contract" on Lot 6, according to Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee.
"They've escaped what we think is a very necessary control on cost," Levin said at a Dec. 9 news conference with McKeon; Sen. John McCain, R-Ariz., the ranking Republican on the Senate Armed Services Committee; and Rep. Adam Smith, D-Wash., the ranking Democrat on the House Armed Services Committee.
Levin expressed his displeasure with the Pentagon for moving ahead with the buy while Congress was still in negotiations.
"Frankly … we took umbrage at the idea that the Air Force, the acquisition folks, would sign a contract for Lot 5 in the face of a Senate provision saying, 'We want no cost-plus contract on Lot 5,' " he said.
Because the Senate provision has not become law, the Pentagon could do it. "But frankly," Levin said, "I'll be calling in these acquisition folks, and I know Senator McCain will be right there at my side."
While the contract used for Lot 5 is not being called a cost-plus contract, it contains too many caveats and loopholes that allow cost increases to be picked up by the government, McCain said.
According to the Pentagon announcement, the contract is a "fixed-price-incentive [firm target]" contract, also known as a FPIF.
"All efforts will be contracted for on a FPIF basis, with the exception of work scope for the incorporation of certain specified concurrency changes that will be contracted for on a cost-sharing/no-fee basis," the DoD announcement reads.
Said McCain: "One would assume that a fixed-cost contract wouldn't allow any additional costs. That's not true anymore. It's become insane."
According to the lawmakers, the bill contains more than 600 different provisions.
The lawmakers presented a united front on the language concerning the treatment of terrorist suspects, urging President Obama not to veto the bill. Obama has threatened to veto the bill over changes on how to handle suspected terrorists.
Levin said the lawmakers added "significant provisions" to provide added reassurance that there would be no interference in civilian interrogations. Smith said Obama "ought to support it and ought to pass it."

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