S’PORE MAY SIGN DEAL FOR TOTAL 71 F-35S WORTH US$9 BILLION

Top Pentagon officials on Wednesday cited both progress and continuing risks on the $396 billion Lockheed Martin Corp F-35 fighter program, and said Singapore had shown “tremendous interest” in the next-generation stealth fighter.

Air Force Lieutenant General Christopher Bogdan, the Pentagon’s F-35 program chief, told a subcommittee that he expects to reach agreement with Lockheed about a sixth and seventh batch of F-35s by the end of May, followed by a contract award in June. Sources familiar with the matter said the deal would cover 71 planes and would be worth about $9 billion.

Bogdan told a subcommittee of the Senate Armed Services Committee that Singapore would likely decide by this summer whether to buy the new warplane.

He said he was also “cautiously optimistic” that South Korea would also join the multinational program when it announces the winner of a 60-plane competition in June.

Boeing Co’s F-15 Silent Eagle and the Eurofighter Typhoon, built by EADS, Finmeccanica SpA and BAE Systems Plc, are also competing for the contract.

The United States is counting on foreign sales of the new radar-evading fighter to help drive down the plane’s cost, which has risen sharply since the program began in 2001 and may go up further if budget cuts by Washington or other countries postpone or curtail their orders…

He said the program’s biggest challenge remained completing the final version of the complex software needed for the plane.

He said he saw “some risk” that the Block 3F software being developed by Lockheed would be delayed beyond late 2017, when the Air Force needs it to be able to start using the warplanes for military operations.

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F-35 JETS CONTAIN MADE-IN-CHINA PARTS, SINGAPORE MAY BUY 71 F-35 JETS

(Reuters, 4 Jan) – The Pentagon repeatedly waived laws banning Chinese-built components on US weapons in order to keep the US$392 billion Lockheed Martin Corp F-35 fighter program on track in 2012 and 2013, even as US officials were voicing concern about China’s espionage and military buildup.

According to Pentagon documents reviewed by Reuters, chief US arms buyer Frank Kendall allowed two F-35 suppliers, Northrop Grumman Corp and Honeywell International Inc, to use Chinese magnets for the new warplane’s radar system, landing gears and other hardware. Without the waivers, both companies could have faced sanctions for violating federal law and the F-35 program could have faced further delays.

“It was a pretty big deal and an unusual situation because there’s a prohibition on doing defense work in China, even if it’s inadvertent,” said Frank Kenlon, who recently retired as a senior Pentagon procurement official and now teaches at American University. “I’d never seen this happen before.”

The Government Accountability Office, the investigative arm of Congress, is examining three such cases involving the F-35, the US military’s next generation fighter, the documents show.

The GAO report, due March 1, was ordered by US lawmakers, who say they are concerned that Americans firms are being shut out of the specialty metals market, and that a US weapon system may become dependent on parts made by a potential future adversary.

The waivers apply to inexpensive parts, including US$2 magnets, installed on 115 F-35 test, training and production aircraft, the last of which are due to be delivered in May 2014. Lawmakers noted that several US companies make similar magnets.

Kendall said the waivers were needed to keep production, testing and training of the Pentagon’s newest warplane on track; avert millions of dollars in retrofit costs; and prevent delays in the Marine Corps’ plan to start using the jets in combat from mid-2015, according to the documents. In one case, it would cost US$10.8 million and take about 25,000 man-hours to remove the Chinese-made magnets and replace them with American ones, the documents indicate.

Lockheed is developing the F-35, the Pentagon’s costliest arms program, for the United States and eight countries that helped fund its development: Britain, Canada, Australia, Italy, Norway, Turkey, Denmark and the Netherlands. Israel and Japan have also placed orders for the jet.

The program is already years behind schedule and 70 percent over initial cost estimates. At the time Kendall was granting the waivers, officials were acutely worried that further delays and cost increases would erode the foreign orders needed to drive down the future cost of each warplane.

In the documents, Kendall underscored the importance of the F-35 program to ensure continued U.S. military superiority and counter potential emerging threats from nations developing their own stealth fighter jets, including Russia and China.

He said additional delays would force the United States and its allies to keep its legacy fighters flying longer, which would result in higher maintenance costs. It would also leave them with older jets, which Kendall said “cannot match the offensive and defensive capabilities provided by F-35.”

The Pentagon first disclosed problems with non-US magnets in a little-noticed written statement to Congress in the spring of 2013. But the statement did not name companies involved and did not disclose that some of the parts came from China.

Officials at Northrop, Honeywell and Lockheed declined to comment on the issue, referring queries to the Pentagon.

Joe DellaVedova, spokesman for the F-35 Joint Program Office (JPO) at the Pentagon, said the office was committed to ensuring that federal defense acquisition laws were strictly followed.

“There was never any risk of technology transfer or other security breach associated with these manufacturing compliance issues,” he said. “The JPO is working with industry to put in place long-term solutions to avoid the need for future waivers.”

In his statement to Congress, Kendall said he took the matter “extremely seriously” and said Lockheed was told to take aggressive steps to identify any further cases, and correct its compliance process.

Bill Greenwalt, a former senior defense official and now an analyst with the American Enterprise Institute think tank, said the risk to national security appeared low since the magnets in question had no programmable hardware.

However, he added: “This is an area that will need considerable due diligence in the future to ensure that components for more high-risk applications are safe from potential tampering and foreign mischief.”

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