Feds to Study Whether Building Fighter in Palmdale Is Cheaper.

There's a chance that new federal legislation could bring Los Angeles one step closer to landing the largest defense contract in history.

On the other hand, the bill requiring the Pentagon to study the cost-effectiveness of building the Joint Strike Fighter in Palmdale could end up being nothing more than a futile political ploy with little significant impact on the final decision.

The massive defense spending bill signed this month by President Clinton contains a provision authored by Rep. Howard McKeon, R-Santa Clarita, calling for the Pentagon to study the cost of building the planes in Palmdale rather than in St. Louis or Fort Worth, the cities preferred by the two competing contractors, Boeing Co. and Lockheed Martin Corp., respectively.

Both companies are developing their concept demonstrators of the next-generation fighter plane for the Army and Navy at their facilities in Palmdale. Both have indicated that, if and when they are awarded the $500 billion contract, they would build the anticipated 3,000 airplanes at assembly facilities outside of California.

But with 10,000 plum jobs at stake, local politicians don't want to let the project slip through their fingers without a fight.

"If the study shows there are significant cost savings in building the plane in Palindale, the Pentagon can put pressure on the companies to build it here," said David Foy, a spokesman for McKeon. "They can't force them, but Boeing and Lockheed are in a very tight competition for the contract and, if one of them can save a few billion dollars by building it here, that could put them at an advantage."

Foy said one reason it might be less expensive to build the JSF in Palindale is that the area already has the facilities in place to build stealth airplanes, after Northrop Grumman Corp. assembled the B-2 Stealth Bomber there.

Even so, industry insiders believe that a Pentagon study will be more of a formality than a deciding factor about where the plane will be built. They said the bill by McKeon could simply be an attempt to appease his constituents.

"It really should not have much of an impact," said Jon Kutler, president of Quarterdeck Investment Partners Inc. "With Contracts of this magnitude, political cover is required for both sides. By doing a detailed study, it allows the local delegation to say that they tried, and it helps the Department of Defense to quantify why a decision is made."

In the end, it will be up to the prime contractors to decide where the final assembly of the plane will take place, and as of now, both Boeing and Lockheed still believe that it can done less expensively at their existing facilities elsewhere.

"If we were to put the JSF in production today, we would build it in Fort Worth," said Joe Stout, a spokesman for Lockheed Martin. "That's our intention right now, but it's much too early to say whether that's where we will end up building it. The JSF is not going into production until the end of the decade, and we will continue to review all our options to see what the most affordable way is."