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The average unit production cost (APUC) for the F-35 is now predicted to be as high as $112 million in current dollars, according to a Pentagon review of the program conducted later last year, which led to a restructuring of the program. The APUC estimate does not amortize the cost of system design and development (SDD). That cost has now risen by $3.2 billion, to $53.2 billion. The SDD phase has been extended by 13 months, and will now end in March 2015. The full-rate production decision (also known as Milestone C) will now be April 2016, after a year of operational test and evaluation. Although the U.S. Marine Corps is still predicting initial operating capability (IOC) in 2012, the IOCs for the U.S. Navy and Air Force have slipped by two and three years respectively to 2016. Only two months ago, a Lockheed Martin official insisted, “The IOCs will hold.”
Ashton Carter, Pentagon senior acquisition official, told a special session of the U.S. Senate Armed Services Committee last week that “affordability must be restored.” The number of low-rate initial production (LRIP) jets to be procured over the next five fiscal years has been reduced by 122. However, an official from the Government Accountability Office warned senators that more than 300 LRIP aircraft would still be procured before the end of SDD, and Carter acknowledged that there was still “unprecedented concurrency” between F-35 development and production. Air Force Maj. Gen. Clyde Moore, the acting head of the F-35 Joint Program Office, noted that the Pentagon “did not uncover any technology or manufacturing show-stoppers in its review, and did not de-scope performance requirements.”