Senate appropriators 'dismayed' at unrealistic EOQ savings estimate from F-35 JPO

Senate appropriators said in their mark of the fiscal year 2019 defense spending bill they are "dismayed" by the inaccuracy of the F-35 joint program office's initial estimates for potential savings from an economic order quantity contract, which lawmakers approved in the FY-18 Omnibus Appropriations Act.

Inside Defense reported this week the Pentagon's cost assessment and program evaluation office estimated potential EOQ savings at $595 million for the Defense Department international partners. That projection is less than half of the $1.2 billion in cost avoidance the F-35 JPO predicted in an October 2017 estimate.

In its version of the mark, released June 28, the Senate Appropriations Committee expressed its disappointment in the JPO's overly optimistic estimate and required a report from F-35 Program Executive Officer Vice Adm. Mat Winter updating Congress on its cost savings estimate and the EOQ procurement approach. The committee also wants an update on how the $660 million appropriated in FY-18 is being executed toward the strategy and an analysis of CAPE's estimate.

The program awarded Lockheed Martin $660 million in early June to support the EOQ buy, which will procure some parts in bulk for low-rate initial production lots 12, 13 and 14. The funds were part of a larger $735 million contract.