Joint Missile Program, After Cost Overruns, Now Threatened By Failure Rate

Top Pentagon Weapons Buyer Krieg Resigns Effective July 20

By Dave Ahearn and Michael Sirak

The Joint Air-to-Surface Standoff Missile (JASSM) program, beset by cost overruns that could terminate it unless it is certified as needed, now won’t get that certification unless its 40 percent failure rate is resolved.

Meanwhile, the program has been slapped with spending and procurement restraints until matters improve, and the Pentagon is examining “remedies” that it may have against the JASSM contractor.

That was the message in a letter to Congress from the top Pentagon weapons buyer, Kenneth J. Krieg, who announced last week that he will be resigning from office July 20, or earlier if a successor is confirmed sooner. He thanked President Bush for giving him the opportunity to serve, saying he leaves to concentrate on his family.

Krieg gave the Air Force little more than three weeks to work out a strategy with Lockheed Martin Corp. [LMT] to increase the JASSM reliability, in the letter to key leaders holding top positions on defense-related committees in Congress.

“I am deferring a decision on whether to certify the JASSM program until sufficient missile reliability has been demonstrated to support a decision,” Krieg wrote.

He conceded that this is an unorthodox move, one necessitated by circumstances. “This is unusual, but I believe it is warranted,” he wrote.

Favoring continuation of JASSM, he noted that the Joint Requirements Oversight Council, with input from combatant commanders, “determined that the capability provided by the JASSM is essential to the national security.”

Krieg was impressed by that, saying it “convinced me that the JASSM program can provide great capability to the warfighter, if it can be made sufficiently reliable.”

While there are other programs that might provide similar capabilities to warfighters, Krieg said that fixing reliability problems with JASSM would be “the most cost-effective course,” but added the caveat that this would be true only if the reliability problems are solved, and that means really solved.

“Before I will certify the program … I must be convinced that it has sufficient system reliability and improved program management in order to get the capability at a cost that the warfighters and taxpayers deserve,” Krieg explained to the lawmakers.

And he made clear, JASSM stands on the brink of extinction.

“If we are not successful in improving the reliability at a reasonable cost, I will not certify the program and it will be terminated,” Krieg warned. Further, “I will set demanding entrance criteria to be satisfied before I make a decision to certify the program.”

He directed Air Force Secretary Michael W. Wynne to provide before the end of the month the strategy for saving JASSM, with plans to correct not only any problems in JASSM design but also to correct unreliability problems that may afflict missiles already in inventory.

Krieg also wants a plan for testing the JASSM Extended Range (ER) version, and how all this will be done while controlling costs and improving management.

“These plans must include off-ramps in case the program is not achieving the milestones for improvements in reliability and program management,” Krieg said.

Meanwhile, the program continues only with strong financial restrictions, until reliability problems are fixed.

Krieg disclosed that he asked the Air Force to devise steps that “should be taken to minimize weapons procurement until we are producing more reliable missiles.”

To that end, Krieg mandated that “no additional funds will be obligated on these existing or new major contracts” for JASSM.

He explained that his intention is “to permit the Air Force to expend funds on new non-major contract(s) to implement the reliability improvement plan,” spelling out items that may be obtained with the money such as test instrumentation kits, ranges and test facilities, and engineering and technical support.

Krieg asked the congressional leaders not to kill JASSM at this point, however.

“I request your support in maintaining the JASSM funding for fiscal years 2007 and 2008 to accomplish this work” of improving JASSM reliability, he wrote, terming the funding “crucial.”

Krieg gave odds for success as favorable. “The path we have selected has a good probability of success and, if reliability and program management can be improved, will provide the best value to the warfighters and taxpayers,” he predicted.

As for Lockheed, “We will explore remedies available to use under our existing contracts in which the contractor assumed total system performance responsibility and provided a 15-year missile warranty,” Krieg stated.

Despite its problems, JASSM still has supporters in the Air Force.

“This is a matter of an incredibly effective capability when it works,” Sue Payton, the Air Force’s acquisition executive, said of the JASSM while briefing reporters in the Pentagon. However, she said, “It is only working 60 percent of the time. That is not acceptable.”

Payton said the Air Force wants the baseline JASSM to reach reliability rates of 75 percent. She said Air Force officials are working closely with Lockheed Martin, but a resolution is not guaranteed at this point.