Cost overruns plague Lockheed Martin's development of F-35

Contracting giant Lockheed Martin Corp. is struggling under the weight of its F-35 Join Strike Fighter program, as costs have ballooned and supply chain gaffes have mounted.

Lockheed, which is one of the biggest companies in the U.S., won the highly coveted contract with the government in the wake of the September 11 attacks, Bloomberg reports. Though researchers have invested more than $66 billion and the past 10 years developing the sophisticated jets, they are years behind schedule.

In fact, research and development is more than five years behind on their production of the F-35s, analysts said. The company has failed to implement business cost reductions as expenses mounted, and it its hurting its bottom line as it prepares for further cuts to the military's budget, which serves as Lockheed's biggest client.

According to Bloomberg, business costs have ballooned 64 percent over prior estimates, and the Obama Administration is reportedly mulling whether to reduce the Pentagon's orders or discard some models altogether.

Ironically, the plane was originally haled as a cost-effective alternative to its exceedingly expensive counterparts, according to former Pentagon chief weapons buyer Jacques Gansler. He said that the jet's development has been a nightmare for federal officials, especially as they await what will likely be further cuts to the Pentagon's budget.

"I'd blame the program's setbacks on the fact that we lived in a rich man's world," he said. "There has been less emphasis on cost over the past 10 years."

That has rapidly changed. Public officials in Washington engaged in bitter discussions this past summer to raise the debt ceiling as the nation's budget deficit soars to near record levels. Political brinkmanship nearly resulted in a U.S. default, and now elected leaders are working to enact budget cuts likely affecting nearly every government-funded organization.

Officials have increasingly scrutinized the military's bloated budget, and they are pushing for military leaders to enact significant cost reductions moving forward. Lockheed officials, however, are struggling to streamline the development process of the F-35.

The Pentagon's budget rose precipitously between 2001 and 2011, soaring from $128 billion to $208 billion. Until recently, the military was less concerned about mounting costs of research and development. Now, leaders are pressing Lockheed to improve efficiency and cut costs, lest they scale back – or potentially cancel – the prized order.