Go Symbol Lookup
Loading...

Defense Firms Know Need for Budget Constraint: Pentagon

 Text Size  
Published: Monday, 19 Jul 2010 | 12:39 PM ET
By: | News Editor, CNBC.com

Major defense and aerospace companies are aware that an inflection point has been reached with the U.S. military budget and costs can not keep climbing, a senior Pentagon official said Monday.

Sharon Lorimer

Speaking at the Farnborough International Airshow, Ashton Carter, the under secretary of defense for acquisition, technology and logistics stressed the importance of the Pentagon's procurement and services efficiency project, noting the need for restoring affordability to military contracts.

"You have to play the game that's on the field," Carter said, referring to how companies would have to adjust to a Pentagon budget that can not continuing grow.

"We can not have costs grow year after year," he said.

Companies also understand that working under a tighter budget is also preferable to the alternatives, such as broken programs, uncertainty in business outlook and, at worst, lost capability for the military.

Carter noted the F-35 joint strike fighter program as a specific example of how things should not operate. The projected cost per fighter was recently revised from more than $50 million per plane to $93 million.

Lockheed-Martin's joint strike fighter program is already the most costly weapons project in the Pentagon's history, according to published reports.

Farnborough International Air Show 2010 - A CNBC Special Report

Among the top priorities of the efficiency program, Carter highlighted the need to review the contract structure and the fixed-priced nature of the early procurement.

 Print
Major defense and aerospace companies are aware that an inflection point has been reached with the U.S. military budget and costs can not keep climbing, a senior Pentagon official said Monday.
  Price   Change %Change
LMT ---
BA ---

   
Comments

 

More Comments

 
 

Add Comments

 

Your Comments (Up to 1100 characters):

Remaining characters

Your comments have not been posted yet.

Please review your submission to make sure you are comfortable with your entry.

Your Comments: