25 September 2010

JSF Costs Finally Under Control?

I guess converting the contract to a firm fixed price deal is one way to gain some cost certainty.

The Pentagon on Thursday said it had reached a "fixed-price" deal with Lockheed Martin to provide more F-35 fighter jets in a bid to contain the cost of the country's most expensive weapons program.

Defense Secretary Robert Gates touted the contract for 30 aircraft signed with Lockheed Martin as part of a broader effort to rein in military spending and force industry to control the costs of weapons projects, which are often overbudget and behind schedule.

"This type of contract shares the costs of overruns between the government and industry up to a fixed ceiling," Gates told a news conference.

"It also shares the rewards when the programs come in under cost," he said.

The fixed-fee contract, worth an estimated five billion dollars, was 15 to 20 percent below an independent cost estimate prepared earlier this year, he said.

By: Brant

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