FY ’17 Defense Spending Bill Slams F-35 Program; Air Force, Navy Programs Get Boosts

The fiscal year 2017 defense appropriations bill released Thursday slams the F-35 program, accusing it of, among other things, allegedly not contracting for the proper number of aircraft in each year as appropriated by Congress.

The bill, drafted by the House Appropriation Committee (HAC), said four F-35s included in the FY ’15 Defense Appropriations Act and 13 aircraft included in the FY ’16 Appropriations Act were not part of their respective low rate initial production (LRIP) contracts to the contracting strategy of F-35 Program Executive Officer (PEO) Air Force Lt. Gen. Christopher Bogdan. Specifically, the bill said, only four F-35Cs were included on LRIPs nine and 10, rather than the 10 F-35Cs enacted the fiscal years 2015 and 2016 National Defense Authorization acts, impeding production efficiencies. CAPITOL

The bill directs the F-35 PEO to use a contracting approach that would award all aircraft included in each appropriations act on the respective production contract for that fiscal year. The agreement includes funding for 74 F-35 aircraft. The F-35 PEO is also directed to brief the congressional defense committees no later than 45 days after the enactment of the bill on the contracting strategy of the aircraft.

The F-35 is being developed and produced by Lockheed Martin [LMT].

The bill also accuses the F-35 program of providing insufficient justification and incomplete information in an untimely manner. It said the potential alternative management structures for the F-35 program being reviewed by the defense secretary will provide an opportunity to improve communication between the F-35 PEO, the military services and the congressional defense committees to ensure the program's funding requirements are fully understood, communicated and justified. The F-35 Joint Program Office (JPO) did not return a request for comment by press time Thursday.

The bill provides $578 billion, an increase of $5.2 billion over the FY ’16 enacted level and $1.6 billion more than the request by the former administration of President Barack Obama. This includes $516 billion in base funding, an increase of $2 billion above current levels, and $62 billion in overseas contingency operations (OCO), or wartime, spending.

Andrew Hunter, director of the defense-industrials initiatives group at the Center for Strategic and International Studies (CSIS) think tank in Washington, said Thursday appropriations bills providing more than authorized amounts happen from time to time. He said usually the authorizers will retroactively authorize the money in the following year’s bill to retain the notional authority to authorize, but it doesn’t have a substantive effect.

Hunter said the only defense accounts where the lack of an authorization has a material effect is military construction and intelligence programs. Multi-year procurements, he said, also have to be authorized.

When combined with the $5.8 billion in supplemental funding enacted in the continuing resolution (CR) passed in December, the total defense funding for FY ’17 is $583.7 billion, an increase of $10.9 billion over FY ’16. The current CR expires April 28. The appropriations bill will be considered on the House floor next week, according to a HAC statement. CSIS defense budget guru Todd Harrison said on Twitter because the spending bill doesn’t include military construction and family housing, it is not the full DoD budget.

Among Air Force programs, the bill bans obligating or expending funds made available by the legislation for pre-milestone B activities after March 31, 2018, for the Joint Surveillance Target Attack Radar System (JSTARS). The bill provides $4.6 billion for the F-35 program, an additional $414 million more than the roughly $4.2 billion authorized by the FY ’17 National Defense Authorization Act (NDAA). It also provides $2.6 billion for the KC-46 aerial refueling tanker program, roughly $200 million less than authorized by the NDAA.

Among Air Force programs, the bill provides $4.6 billion for the F-35 program, $414 million more than the roughly $4.2 billion authorized by the FY ’17 National Defense Authorization Act (NDAA). It also provides $2.6 billion for the KC-46 aerial refueling tanker program, roughly $200 million less than authorized by the NDAA. Boeing [BA] is developing the tanker.

The bill provides $93 million for the UH-1N helicopter replacement effort, roughly $75 million more than authorized by lawmakers. The bill also provides more than twice the amount of money authorized for the Lockheed Martin-built C-130J program. The bill provides $306 million, which includes two additional aircraft for the Air National Guard. But only $146 million was authorized by the NDAA.

Among munitions, the appropriations bill funds to authorized levels the Joint Air-to-Surface Standoff Missile (JASSM--$432 million), The Long-Range Anti-Ship Missile (LRASM--$60 million) and Small Diameter Bomb (SDB--$92 million). But the bill provides slightly less than authorized for Raytheon [RTN]-built Advanced Medium Range Air to Air Missile (AMRAAM). The bill provides $337.8 million, roughly $1.5 million less than authorized. The bill also provides $291 million for the Joint Direct Attack Munition (JDAM), nearly $7 million less than requested.

For space programs, the bill funds to authorized levels the Advanced Extremely High Frequency (AEHF) program at $646 million and the Global Positioning System III (GPS III) space segment at $34 million. The bill provides $717 million for Evolved Expendable Launch Vehicle (EELV) capability program, $26 million less than the authorized amount. The bill cites a change to acquisition strategy for the program. The bill funds to the authorized amount of $536 million for the EELV space vehicle program.

In Navy programs, the bill funds the CH-53K heavy lift helicopter program at $332 million, $17 million less than the nearly $349 million authorized. The bill provides roughly $1.4 billion for the V-22 program, $143 million more than authorized. The bill funds the P-8A Poseidon anti-submarine warfare aircraft program with $1.8 billion, roughly $43 million less than requested.

The bill also funds $1.3 billion for the Navy’s F-35C carrier variant, providing two additional aircraft for the Navy and two more for the Marine Corps. The $1.3 billion is $421 million more than authorized in the FY ’17 NDAA. The bill funds roughly $2.3 billion for the short takeoff and vertical landing (STOVL) portion of the F-35 program, $255 million more than authorized.

For Navy ships, the bill provides $3.6 billion for the DDG-51 program, reducing two ships from the amount requested for FY ’17. The $3.6 billion funded for DDG-51 is roughly $300 million more than authorized. The bill also provides the $3.2 billion authorized for the Virginia class submarine program. It funded $1.7 billion for the CVN refueling overhaul, roughly $44 million less than authorized.

The bill provides $150 million in advanced procurement funding for the Navy to buy long-lead time material for the lead ship of an affordable polar icebreaker. The bill directs the Navy and Coast Guard to refine requirements and an acquisition strategy for procurement. This collaboration, according to the bill’s explanatory statement, continues to refine program costs and requirements in an effort to award a detailed design and construction contract for the lead ship in FY ’19. No funding was provided for this in the Obama administration’s request.

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