By Andrea Shalal-Esa
WASHINGTON (Reuters) - The Pentagon needs to budget $12.6 billion each year through 2037 to finish developing and paying for all the Lockheed Martin Corp F-35 fighters it plans to buy, according to a report released by a congressional watchdog agency on Monday.
This amounts to $2 billion more in projected annual funding needs than the Government Accountability Office (GAO) had included in a draft report obtained and published by Reuters on Saturday.
The draft report excluded the cost of the fighter's single engine, which is built by Pratt & Whitney, a unit of United Technologies Corp, said Joe DellaVedova, a spokesman for the Pentagon's F-35 program office.
The report said the Pentagon was expected to shell out $316 billion through 2037 on the remaining development and purchase of the radar-evading warplane, on top of billions of dollars already spent, for a total program cost of around $400 billion.
"Overall, the F-35 Joint Strike Fighter program is now moving in the right direction after a long, expensive, and arduous learning process. It still has tremendous challenges ahead," GAO concluded in its annual report to Congress on the F-35, the Pentagon's costliest weapons program.
The F-35 is an advanced fighter meant to serve the U.S. Air Force, Navy and Marines for decades to come. The program, which has seen costs rise 70 percent from initial projections amid numerous technical complications, is facing a critical phase in which any new setbacks or reductions in orders from the U.S. military and its allies would further boost the cost per plane.
The U.S. military has more work ahead on the program but remains committed to the development and procurement of the F-35 fighter, said Air Force Lieutenant General Christopher Bogdan, who runs the program for the Pentagon.
"We have more work to do and we're committed to delivering on the promise of the F-35; it will form the backbone of U.S. air combat superiority for generations to come," Bogdan said.
Lockheed said it was working with the F-35 program office, military services, international partners and suppliers to drive down the cost of building and operating the new fighter jets.
"The F-35 program has made significant progress and we are singularly focused on executing on our commitments for the F-35 development, production and sustainment programs," said Lockheed spokesman Michael Rein. He said the cost of the planes had already come down 50 percent since the start of production, and Lockheed consistently beat U.S. government pricing estimates.
The Pentagon estimates it will cost over $1 trillion for the cost of operating and maintaining all 2,443 warplanes it plans to buy, over an estimated 30-year service life. The Pentagon and F-35 program office are working to reduce those costs, which the GAO report said were 60 percent higher than those applicable to aircraft the F-35 is slated to replace.
The GAO report said the Pentagon's Cost Assessment and Program Evaluation (CAPE) office recently forecast annual operations and maintenance costs of $18.2 billion for all three models of the F-35, compared to $11.1 billion spent in 2010 to operate and sustain the legacy aircraft.
The "(Department of Defense) and the contractor now need to demonstrate that the F-35 program can effectively perform against cost and schedule targets in the new baseline and deliver on promises," the report said.
"Achieving affordability in annual funding requirements, aircraft unit prices, and life-cycle operating and support costs will in large part determine how many aircraft" the U.S. military can ultimately acquire, it said.
(Reporting By Andrea Shalal-Esa)