March 12, 2010 The Minister for Defence, Senator John Faulkner, today confirmed that the Government remains confident the F-35 Joint Strike Fighter (JSF) is the right choice for the Australian Defence Force’s next-generation air combat capability, and will enable the Australian Defence Force to maintain its strategic air combat capability advantage out to 2030.

Responding to the recent developments in the JSF program, Senator Faulkner noted that the JSF program would produce over 3000 aircraft for United States (US) Services and international partners. Senator Faulkner said, “As with all highly complex and cutting edge projects, risks are to be expected.”

“As I said on 2 February 2010, the Australian Government’s staged acquisition strategy for the JSF includes significant cost and schedule buffers to deal with project risks which will ensure initial operational capability in 2018 is met.”

“Defence will continue to maintain close and regular contact with the US to ensure the success of this vital project.”

As a result of the latest US JSF cost update, US Defense Under Secretary Acquisition, Technology and Logistics, Dr Ashton Carter has told the United States Senate Armed Services Committee that he expected the F-35 Joint Strike Fighter Program to experience a Nunn-McCurdy funding breach.

Nunn-McCurdy is US legislation which requires Congressional review of major projects when growth in an acquisition program’s cost estimates exceeds specific thresholds. In the case of the JSF Program, the Nunn-McCurdy breach involves growth in estimated costs for the program exceeding 50 per cent since 2002.

The thorough review now required will be a continuation of the restructuring process announced by Secretary Gates on 1 February 2010 in expectation of a Nunn-McCurdy breach.

Senator Faulkner discussed JSF progress – including the implications of a potential Nunn-McCurdy breach – with US Deputy Secretary for Defense William Lynn in Canberra on 16 February 2010. Senator Faulkner said, “While risks remain, Deputy Secretary Lynn assured me that the US is fully committed to making the JSF Program succeed.”

Senator Faulkner also said, “The JSF Program Office advises that no significant implications are expected for the JSF Partner countries as a result of the Nunn-McCurdy breach due to the restructuring action which has already been taken in the US.

“The adoption of a more conservative budgeting approach by the US Department of Defense for the JSF Program – particularly for early aircraft where cost risk is highest – is a sound management approach for such a large and complex project.

“Australian Defence planning has always adopted a cautious approach to JSF cost estimates by factoring in significant amounts of contingency funds to deal with cost risks,” Senator Faulkner said.