Protracted negotiations between manufacturer Lockheed Martin and the U.S. on the next lot of stealthy, single-engine F-35s are nearing a conclusion as program officials close in on a new baseline for the embattled program.

But the shock waves of recent cost increases to the multinational Joint Strike Fighter (JSF) continue to ripple; Israel, for one, is sharply curtailing its buy. Lockheed Martin, however, continues to insist the price is lower than estimated by the Pentagon (see p. 41).

U.S. program officials must resubmit in November a new master schedule, including testing plans and detailed technical reports, to the Defense Department as part of the ongoing process of recertification following a massive restructuring announced early this year, says Tom Burbage, Lockheed Martin executive vice president for F-35 program integration. Pentagon officials certified the project to move forward last month, but final details need to be reviewed.

Pentagon cost estimates that brought the projected average unit expenditure up to as high as $108.7 million only a few months ago are being revised, according to an industry official. “Since then, the government is modifying its cost models to be more in line with Lockheed Martin’s models.” However, the Defense Department is sticking by its numbers. In accordance with the Nunn-McCurdy cost-control statute, the Pentagon’s Cost Analysis and Program Evaluation office developed the estimates earlier this year and “at this time CAPE does not have any data which support a change from that Nunn-McCurdy estimate,” says a Pentagon spokeswoman.

As part of the new baseline that will go before the Defense Acquisition Board in November, officials are revising the estimate to include operations and life-cycle maintenance costs. “It is premature to suggest that changes to the Nunn-McCurdy acquisition cost estimate will occur as a result of that process.”

CEO Robert Stevens says the unit recurring flyaway price at peak production for the conventional takeoff and landing (CTOL) variant is about $60 million, though today’s challenge is the high price of early aircraft rolling off the production line.

Meanwhile, Boeing is also making available to some JSF partner nations an F/A-18E/F Super Hornet upgrade to improve survivability, a move that could replicate the pressure on the program brought about by its F-15 Silent Eagle stealthy retrofit kit (see p. 37). “F-35 is not ready for international sales, in my view, but even when it is, it will always cost more than the Super Hornet,” says Chris Chadwick, president of Boeing Military Aircraft.

Despite the cost, pressure from growing threats appears to be driving Israel to a truncated JSF buy.

“The F-35 is the only available aircraft that could maintain the [air force’s] superiority in the region,” says a senior service source. Israel is concerned that as it procures the F-35, the U.S. will supply the F-15 Silent Eagle—which last week conducted its first weapons release—to Saudi Arabia and that advanced Russian air defenses will be deployed in the region.

Eager to conclude negotiations, the air force opted to postpone some of its initial requirements, such as integrating Rafael’s Spice guided-bomb unit and Python-5 air-to-air missile. These would have required structural modifications to both the aircraft and the munitions, driving the cost even higher. The requirement to install an external 600-gal. fuel tank was also deferred.