GAO Urging Slowdown for Fighter Project

The Defense Department should delay selection of a prime contractor for its Joint Strike Fighter program because neither of the two candidates, Lockheed Martin Corp. and Boeing Co., is making sufficient progress, according to a draft congressional audit.

The 29-page report, obtained by Bloomberg News, is the first independent review of the JSF project, the largest jet fighter program in U.S. history. The report warns that both contractors face delays and cost overruns and advises that the program be slowed.

“To allow the JSF to proceed as planned--without maturing critical technologies--would perpetuate conditions that have led to cost growth and schedule delays in many prior [Pentagon] weapons system acquisition programs,” wrote the General Accounting Office, the congressional audit agency.

In fact, “recent contractor reports indicate there are cost growth and schedule concerns for both competing contractors,” the GAO wrote. Lockheed Martin, for example, “has significant cost concerns” with producing the two demonstrator aircraft and Boeing had to redesign its planes “to meet program requirements.”

The Pentagon is weighing whether to abandon the program’s winner-take-all strategy in favor of a team approach that keeps both contractors in business as viable aircraft manufacturers. The report could provide officials with justification for this switch.

The project holds the potential for $200 billion in sales of as many as 6,000 fighters through 2020. Boeing fell $1.38 to close at $32.38, while Lockheed Martin fell 31 cents to close at $16.81, both in New York Stock Exchange trading Friday.