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Exclusive: U.S. Navy aims to put 22 Boeing fighters on 'unfunded' list - sources

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young
The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

By Andrea Shalal

WASHINGTON (Reuters) - The U.S. Navy plans to add 22 Boeing electronic attack jets to a list of "unfunded" priorities requested by Congress, but the document must still be vetted by senior Pentagon officials, who have underscored their commitment to Lockheed Martin Corp's next-generation F-35 fighter jet, sources familiar with the matter told Reuters.

Defense Secretary Chuck Hagel told the military services in a memo on Thursday they could respond to the House Armed Services Committee's request, but said the lists should be coordinated with his office and that of General Martin Dempsey, chairman of the Joint Chiefs of Staff, according to a defense official.

The defense official and multiple other sources spoke on Wednesday and Thursday on condition of anonymity because the unfunded priorities lists have not yet been formally submitted to Congress.

Given that shrinking budgets are leaving the services with myriad unmet needs, Hagel does not intend follow the lead of former Defense Secretary Robert Gates, who tried to block the lists from being sent to Capitol Hill, the official said.

"This is a different time. We've had to make tough choices, and budgets are coming down. Part of what we want to do is demonstrate to Congress that our military has needs that are not fulfilled by sequestration," the official said.

At the same time, the department's priorities were clearly outlined in its 2015 budget plan and the separate $26.4 billion "growth fund" set up by the White House, the official said.

And those priorities, said two of the sources, did not include more Boeing Co F/A-18 Super Hornets or EA-18G Growlers, which will end production in 2016 unless more orders come in.

The Navy did not seek funding for either plane in its budget, or in its part of the separate "growth" fund. But it plans to add 22 Growlers to its unfunded priorities list, said four sources familiar with the issue.

A Navy spokesman declined to comment, saying only that the service was still finalizing its unfunded priorities list.

The document also includes eight P-8A surveillance planes built by Boeing for $1.1 billion, and restores funding for continued operation of the USS George Washington carrier and its associated air wing, said one source familiar with the Navy list.

The document put the cost of the extra planes at $2.14 billion and said they would let the Navy expand each Growler squadron on a carrier to seven jets from five, offering more electronic attack capabilities for the joint force, the source said.

The document also referenced ongoing studies by the Navy and the Defense Department that pointed to increasing threats.

A second source said the Navy's request for more Growlers was likely to meet resistance from senior defense officials, given competing demands for resources, a strong commitment to the F-35, which includes a carrier-based model for the Navy, and a general shift away from single-purpose aircraft.

"There is no validated requirement," said the source.

Navy and senior U.S. defense officials have repeatedly said they have no plans to extend Boeing's F/A-18 and EA-18G production line in St. Louis, which is due to shut after 2016.

Boeing spokeswoman Karen Fincutter urged Congress to add funding for the Growlers to keep the production line going.

"The Super Hornet and Growler are the backbone of the Navy's carrier air wings today, and will be through at least 2040. If funding to extend production of those aircraft isn't provided, unique industrial capabilities will be lost and the U.S. will be solely dependent on one tactical aircraft manufacturer for years to come," she said.

Congress already added $75 million in funding for advanced procurement for 22 EA-18G jets to the Navy's fiscal 2014 budget, but those funds have not yet been released.

Congressional aides say lawmakers need evidence of the Navy's interest in extra Growlers to justify adding funding to the fiscal 2015 budget, but caution that finding $2 billion for 22 more EA-18G jets would mean cuts elsewhere.

"It means you have to slaughter somebody else's ox," said one aide who was not authorized to speak publicly.

Boeing has said it can slow production of the jets to around two planes a month without a big impact on pricing. It said it could stretch production into mid-2017, if the Navy agrees to a slower delivery rate of jets already on order.

That means Congress could fund about half the 22 Growlers and still allow the production line to keep running through 2017, said one source familiar with the matter.

House Armed Services Committee Chairman Buck McKeon last month asked the services, combatant commanders and National Guard to submit a list of programs that did not get included in the budget. He left the door open to a number of programs, asking for those needed to meet a "validated requirement" or other military priority, as well as items for which requirements emerged after the budget was drafted.

The sources said the Marine Corps was also expected to ask for six F-35 fighter jets as part of its unfunded priorities list. It plans to ask for one F-35 B-model jet, which can land like a helicopter, and five F-35 carrier models, to replace six Harrier jets destroyed in Afghanistan.

(Reporting by Andrea Shalal; Editing by Richard Chang)

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