F-35 now $133 million flyaway, $155 million including dev

This comes from neither Bill Sweetman nor Bob Cox nor even from me. First up, Aviation Week and the F-35-friendly Amy Butler...

http://www.aviationweek.com/aw/generic/ ... 0Increases

Pentagon Recertifies JSF, Cost Increases

By Amy Butler

Pentagon acquisition czar Ashton Carter recertified the embattled Lockheed Martin Joint Strike Fighter program to move forward after a major cost increase, but defense officials are now saying the total acquisition price of the multinational, triservice aircraft has increased by yet another $54.2 billion.

Carter sent his Nunn-McCurdy recertification letter to Congress on June 1. This recertification was widely expected, as Pentagon officials since last fall have been working to restructure the single-engine, stealthy fighter program through a series of rigorous reviews in anticipation of the cost breach. But the recertification documentation includes more detail about the extent of problems leading up to the most recent cost spike.

Since December, Pentagon officials anticipated the per-unit cost including the price of development to be $112 million; it is now expected to be $155.6 million. The number most closely associated with flyaway pricing was estimated at $92.4 million only a few months ago; it is now at $133 million. Earlier this year, development was extended from Fiscal 2012 to Fiscal 2016 in an effort to reduce schedule risk and concurrency between testing and production.

The increased price is a result of new estimates for developing a verification simulation capability, tooling needed for production and military construction requirements for introducing the aircraft into service, according to Carter’s documentation.

The Air Force and Navy will be required to “take necessary actions to fund the program” and the additional overrun and the money will likely start to shift in the Fiscal 2012 budget request, due to Congress in February 2011, according to Carter’s documents.

Cultural issues during the program’s history also contributed to a climate that allowed cost to grow unchecked. A section of the document labeled “root cause analysis and assessment” acknowledges “flawed programmatic and technological assumptions at program inception and a series of execution actions which hindered the overall government/contractor management’s ability to address these problems as they were encountered.” Carter also points out that there was a “general intolerance for failing to meet externally driven schedule goals” and a “general reluctance to accept unfavorable information” in the program.

Delays in reaching developmental milestones account for 26% of the cost increase. Another 23% is from correcting airframe weight estimates that were low, incorrect escalation rates and an incorrect use of a cost model in the earlier acquisition strategy. Five percentage points account for the extension of production.

Carter certifies that the management structure is adequate to manage cost, but he includes a list of actions required to improve oversight of the program. The government is providing expertise to JSF prime contractor Lockheed to improve the company’s compliance with the Defense Department’s Earned Value Management System (EVMS), which is a method used to allow the department to audit and track progress on major elements of the program. The corporation has been deemed “non compliant” with EVMS standards. The situation is “disappointing and unacceptable,” Carter says.

A corrective action plan is being implemented, and Carter directs completion by June 30. Furthermore, he directs that a compliance review be successfully completed by the second quarter of Fiscal 2011, which ends next March.

Carter has established a review process to rectify differing risk-management approaches by Lockheed and government managers. Also, an Independent Manufacturing Review Team will reassess the program’s risk-management planning and global supply chain in the fall (the IMRT’s first set of recommendations were already included in the restructuring).

The JSF program executive officer is crafting a plan to address 42 “areas of concern” in the flight test plan. Those areas are not identified in the documentation.

No commentary or editorializing there at all from Ms. Butler. Just the facts, and the facts are damning:

* "Defense officials are now saying the total acquisition price of the multinational, triservice aircraft has increased by yet another $54.2 billion."

Ouch. I'm sure most here would consider an additional $54.2 billion a small figure well worth wasting, I mean spending.

* "Since December, Pentagon officials anticipated the per-unit cost including the price of development to be $112 million; it is now expected to be $155.6 million. The number most closely associated with flyaway pricing was estimated at $92.4 million only a few months ago; it is now at $133 million."

So much for the long-quoted $60 million touted by LM and many here as recently as, well, now. So much for Loren Thompson's contention that it will cost about as much as an F-16. Wouldn't you know it, it will cost, flyaway, pretty much exactly as much as the last F-22s coming off the line, a vastly superior plane whose production was curtailed because it was deemed unafordable. Excuse me while I retch. Bleah. Absolutely disgusting and despicable. Criminal, in fact.

* "Cultural issues during the program’s history also contributed to a climate that allowed cost to grow unchecked."

No $hit! Exactly as I've been saying for years! The cretins at LM had been doing whatever the hell they please with absolute impunity and immunity, until the government finally stepped in and started cracking skulls. You know what that kind of behavior is called? Criminal, that's what.

* "...flawed programmatic and technological assumptions at program inception and a series of execution actions which hindered the overall government/contractor management’s ability to address these problems as they were encountered."

Translation: sheer, total and unadulterated management idiocy and incompetence. If this program had been run during Stalinist Russia, everyone involved would have been shot.

* "...there was a general intolerance for failing to meet externally driven schedule goals..."

Translation: more idiocy and incompetence, with the addition of stupidity and arrogance thrown in for good measure.

* "...there was... a general reluctance to accept unfavorable information in the program.

Nah! Ya don't say! Reminds me of the "general reluctance" to accept reality omnipresent in this forum. Let's all do like ostriches and bury our tiny little heads with tiny little brains in the sand! Yay! How fun!

* Delays in reaching developmental milestones account for 26% of the cost increase. Another 23% is from correcting airframe weight estimates that were low, incorrect escalation rates and an incorrect use of a cost model in the earlier acquisition strategy. Five percentage points account for the extension of production.

Translation: Nothing to do with the evil Congress and evil politicians or evil anyone else. It's all about LM, LM and LM. Incompetence, idiocy, stupidity, arrogance, you name it. Heck, Stalin himself would have done the shooting.

I take a view other than the anti-corporate, anti-LM line on this, sextus. (however easy an reaction (and temptation), especially these days, to want to jump right for the corporate juglar)

But it's rather a JPO issue at heart (yes, JPO would include elements of the winning JSF Program contractor, LM, sure) and it (JSF Program) is unfortunately an inherently flawed business model from inception - hence, nothing LM, Boeing, Northrop, or even Stalin himself could implement efficiently by design! So in short, it's a flawed plan from inception, being controlled by a flawed Program Office, policing the plan.

Please note my viewpoint has nothing to do with the actual technical capability potential of the eventual IOC jet and my utmost respect for the engineers and mechanics on the floor. Two separate issues.

geogen wrote:I take a view other than the anti-corporate, anti-LM line on this, sextus. (however easy an reaction (and temptation), especially these days, to want to jump right for the corporate juglar)

But it's rather a JPO issue at heart (yes, JPO would include elements of the winning JSF Program contractor, LM, sure) and it (JSF Program) is unfortunately an inherently flawed business model from inception - hence, nothing LM, Boeing, Northrop, or even Stalin himself could implement efficiently by design! So in short, it's a flawed plan from inception, being controlled by a flawed Program Office, policing the plan.

Please note my viewpoint has nothing to do with the actual technical capability potential of the eventual IOC jet and my utmost respect for the engineers and mechanics on the floor. Two separate issues.

I can agree with much, indeed most of what you write. The idea that an AFFORDABLE plan could never made to work, considering the requirements laid out by the JPO, is probably true. It's probably positively true, actually. What irks me is that LM lied and lied and lied about the progress, or the lack thereof, of the program, knowing all it had to do was wait it out until it became, everyone now, too big to fail. That bothers me. That makes my blood boil. I hate being lied to and manipulated.

Your final paragraph I can second. I've never been critical of the jet's putative performance. In fact, as regard claims of its capabilities, I am more readily willing to believe LM over, say, APA. I can also second your respect for the engineers and mechanics on the floor. LM corporate and LM management, on the other hand, can eat my shorts. Oh, yeah, and LM PR, especially LM PR.

Geo, now, tell the truth, does it not bother you one bit that we are having this jet shoved down our throat at absolutely abominable prices because it is too big to fail? Maybe it's just me. But when one of the major selling points for anything is affordability, and then it proves to be just the opposite, it just makes me see red. As Sweetman well pointed out, once the F-35 became unaffordable, it FAILED in its entire reason for existence. Period. End of story.

The 189th F-22 would have cost around $140 million. There is no price quote for 2,443 F-22's, or a large new run of F-16's or any other aircraft. People throwing away numbers based on the total export contract for a small run of current aircraft including many items beyond the aircraft do everyone a disservice.

One can assume the F-35 is a world class aircraft and still be concerned over affordability. We are past the point when the reality of the acquisition costs can be ignored. The extra $54 billion means the program now is projected to cost $382 billion. The flight test program has barely begun. The USAF and USN IOC dates are six years from now. Dr Carter makes a point when he briefs on cost projections that they are only estimates. So far the estimates continue to rise.

The next shoe to drop will probably be the total numbers. The USAF is not going to get 1,763 F-35A's and certainly the Congress is not going to buy 80 a year either. The QDR shows 16 tactical fighter wings. Assuming 3 wings of F-22's and F-15E's and total replacement of every other wing by F-35A that's 13 wings or 936 primary aircraft which the normal formula would add about 50% for training, reserve, etc., to yield 1,404. Personally I don't believe we'll go over 12 wings which would be 1,296. In any case at some point the program costs need to reflect how many the US will actually purchase. The 1,763 or around 16 total combat wings was pre the 2010 QDR which lowered force structure. The C is the most expensive version being produced for one customer- the USN. The risk of the C being canceled is significant.

This aside it's more than problems at JPO. Certainly JPO was not in touch with reality for years and failed to properly manage the program. However, LM bears a lot of responsibility. All those JET, GAO, and other reports everyone dismissed for a few years turned out to be substantially correct and JPO was putting out mendacious rubbish and they should have known better given the monthly reports they were getting from DCMA- the Oct 2007 through Nov 2009 reports are available in the DCMA reading room online. However, LM was fully aware of the issues DCMA was presenting to JPO. The main reason the flight test program is so hideously behind schedule is LM's inability to build the aircraft in a timely manner.

DOD had a deadly serious come to Jesus moment in late 2009 over JSF and that was publicly revealed in early 2010. The head of the JPO was fired, the program restructured, and the cost projections brought in line with what JET had been saying for some time. The assumption that all is well and that the aircraft is just going to cost more than we all thought is not entirely fact based. It's not even a best case scenario. There is no question the total US buy will come down from 2,443- if only based on the QDR. The flight test program is not going to be problem free- they never are. CAPE added $54 billion to the program from what it was saying just 2 months prior. The costs are going to continue to rise and as we and others purchase lower numbers the unit cost is just going to rise further. This program will be restructured again at some point.

It's worth repeating the aircraft itself will probably end up being not just world class but a world leader. What it is not is an affordable strike fighter. It's a rather expensive world class stealthy strike fighter while sold as an F-16 replacement is actually a much larger aircraft. The F-35A empty weighs more than an F-15C and has a higher max take off weight as well. That's another flaw from inception in trying to replace the low part from the high/low mix with a large and very advanced design. Before someone chimes in to remind us all that the F-35 weight is deceptive in that it doesn't require external tanks yes that's quite right. It's still not an F-16 class aircraft with internal fuel. It's far larger than the AV-8B- in fact the B weighs more than twice as much empty, loaded, or max t.o. Certainly it's a much more capable aircraft by leaps and bounds.

Aircraft twice as large with more many times more capability are not true replacements for legacy aircraft. Everyone knows this. Sec Gates months ago was 100% clear that the F-35 is not going to replace legacy aircraft at anything near 1 for 1 in the US. He also stated in that Congressional testimony that he considered some UCAS units as direct, and superior, replacement for some fighter units (he was talking Predator at the time replacing F-16's). The QDR reflects this reality. The 1,763 F-35A number is going to fall substantially at some point and this will drive costs up higher. It's just one more cost increase not factored in yet. Anyone that tells you they know how much this bird will cost is in fact wrong. Nobody knows. All we have are current projections that are likely to continue to rise over time.

At some point no matter how wonderful the world class aircraft happens to be it becomes too expensive. This is not to say we've reached that point. However, it should be clear to everyone that point is not a fictional construct.

Oh, you'll be so disappointed when you realize the F-35 to be a $60 mil aircraft.

lb wrote:The 189th F-22 would have cost around $140 million. There is no price quote for 2,443 F-22's, or a large new run of F-16's or any other aircraft. People throwing away numbers based on the total export contract for a small run of current aircraft including many items beyond the aircraft do everyone a disservice.

One can assume the F-35 is a world class aircraft and still be concerned over affordability. We are past the point when the reality of the acquisition costs can be ignored. The extra $54 billion means the program now is projected to cost $382 billion. The flight test program has barely begun. The USAF and USN IOC dates are six years from now. Dr Carter makes a point when he briefs on cost projections that they are only estimates. So far the estimates continue to rise.

The next shoe to drop will probably be the total numbers. The USAF is not going to get 1,763 F-35A's and certainly the Congress is not going to buy 80 a year either. The QDR shows 16 tactical fighter wings. Assuming 3 wings of F-22's and F-15E's and total replacement of every other wing by F-35A that's 13 wings or 936 primary aircraft which the normal formula would add about 50% for training, reserve, etc., to yield 1,404. Personally I don't believe we'll go over 12 wings which would be 1,296. In any case at some point the program costs need to reflect how many the US will actually purchase. The 1,763 or around 16 total combat wings was pre the 2010 QDR which lowered force structure. The C is the most expensive version being produced for one customer- the USN. The risk of the C being canceled is significant.

This aside it's more than problems at JPO. Certainly JPO was not in touch with reality for years and failed to properly manage the program. However, LM bears a lot of responsibility. All those JET, GAO, and other reports everyone dismissed for a few years turned out to be substantially correct and JPO was putting out mendacious rubbish and they should have known better given the monthly reports they were getting from DCMA- the Oct 2007 through Nov 2009 reports are available in the DCMA reading room online. However, LM was fully aware of the issues DCMA was presenting to JPO. The main reason the flight test program is so hideously behind schedule is LM's inability to build the aircraft in a timely manner.

DOD had a deadly serious come to Jesus moment in late 2009 over JSF and that was publicly revealed in early 2010. The head of the JPO was fired, the program restructured, and the cost projections brought in line with what JET had been saying for some time. The assumption that all is well and that the aircraft is just going to cost more than we all thought is not entirely fact based. It's not even a best case scenario. There is no question the total US buy will come down from 2,443- if only based on the QDR. The flight test program is not going to be problem free- they never are. CAPE added $54 billion to the program from what it was saying just 2 months prior. The costs are going to continue to rise and as we and others purchase lower numbers the unit cost is just going to rise further. This program will be restructured again at some point.

It's worth repeating the aircraft itself will probably end up being not just world class but a world leader. What it is not is an affordable strike fighter. It's a rather expensive world class stealthy strike fighter while sold as an F-16 replacement is actually a much larger aircraft. The F-35A empty weighs more than an F-15C and has a higher max take off weight as well. That's another flaw from inception in trying to replace the low part from the high/low mix with a large and very advanced design. Before someone chimes in to remind us all that the F-35 weight is deceptive in that it doesn't require external tanks yes that's quite right. It's still not an F-16 class aircraft with internal fuel. It's far larger than the AV-8B- in fact the B weighs more than twice as much empty, loaded, or max t.o. Certainly it's a much more capable aircraft by leaps and bounds.

Aircraft twice as large with more many times more capability are not true replacements for legacy aircraft. Everyone knows this. Sec Gates months ago was 100% clear that the F-35 is not going to replace legacy aircraft at anything near 1 for 1 in the US. He also stated in that Congressional testimony that he considered some UCAS units as direct, and superior, replacement for some fighter units (he was talking Predator at the time replacing F-16's). The QDR reflects this reality. The 1,763 F-35A number is going to fall substantially at some point and this will drive costs up higher. It's just one more cost increase not factored in yet. Anyone that tells you they know how much this bird will cost is in fact wrong. Nobody knows. All we have are current projections that are likely to continue to rise over time.

At some point no matter how wonderful the world class aircraft happens to be it becomes too expensive. This is not to say we've reached that point. However, it should be clear to everyone that point is not a fictional construct.

Superb post, simply superb. That's the most level-headed, true-to-reality writing I've yet read on the F-35. The key statement is this, "One can assume the F-35 is a world class aircraft and still be concerned over affordability." That's been my entire point all along in blasting this misbegotten behemoth of a defense program. While I thought at first you were a Congressional aide, I was clearly underestimating you. You must work for the GAO and as such, I applaud your work. The GAO is very rarely wrong, at least as regard defense programs. Shame everyone involved in this program didn't listen to you folks earlier. Now, it looks like there's no turning back. We are soooooo royally screwed...

deleted: could be perceived the wrong way.

bumtish wrote:Oh, you'll be so disappointed when you realize the F-35 to be a $60 mil aircraft.

If that were to happen, I can assure you the likes of lb, geogen and I would be positively thrilled, just like I'd be thrilled if I were offered proof of, say, the Easter Bunny or Santa Claus. Alas, the latter two, and the idea of an affordable F-35, are but figments of a childish imagination.

Since you trust JET, check the link. That's the fly-away which JET I found. JET II didn't differ a lot from those. JET II are the exact numbers CAPE is based on.

http://i896.photobucket.com/albums/ac16 ... ET2008.jpg

sextusempiricus wrote:

Geo, now, tell the truth, does it not bother you one bit that we are having this jet shoved down our throat at absolutely abominable prices because it is too big to fail? Maybe it's just me. But when one of the major selling points for anything is affordability, and then it proves to be just the opposite, it just makes me see red. As Sweetman well pointed out, once the F-35 became unaffordable, it FAILED in its entire reason for existence. Period. End of story.

What makes me more upset is when I see price quotes that are inflated trying to show a picture that's not necessarily the case, and then see these stories parroted.

wrightwing wrote:

sextusempiricus wrote:

Geo, now, tell the truth, does it not bother you one bit that we are having this jet shoved down our throat at absolutely abominable prices because it is too big to fail? Maybe it's just me. But when one of the major selling points for anything is affordability, and then it proves to be just the opposite, it just makes me see red. As Sweetman well pointed out, once the F-35 became unaffordable, it FAILED in its entire reason for existence. Period. End of story.

What makes me more upset is when I see price quotes that are inflated trying to show a picture that's not necessarily the case, and then see these stories parroted.

Inflated by whom? What story is being "parroted"? By Aviation Week, the outfit that pulled a reporter off the beat because he had begun to be perceived as no longer being objective (or the truth, because LM asked that he be pulled)? Is it being parroted by the same Pentagon that for years refused to admit to itself and to Congress that the program was years behind schedule and hundreds of billions of dollars over budget (yes, that's right, hundreds of billions)? What have "not necessarily been the case" are LM's and the JPO's estimates and numbers, amply and extensively demonstrated. Wrightwing, you make Monty Python's Dark Knight seem reasonable. Baghdad Bob himself would be appalled by your total disconnect with reality.

I find it hard to believe that the F-35 will be that expensive. The SH fully equipped costs about 50 million.

If you compare the 2:
- The F-35 weights about as much as the F-18E.
- one F135 is probably not more expensive than 2 F414
- the F-35 DSI intake is probably not more expensive than the F-18 intakes
- the radars have about the same size.
- the F-35 cockpit is more sophisticated but it is because electronics has improved. Same for the computers.
- the F-35 HMS is probably not more expensive than the JHMCS+ the HUD
- the EOTS is derived from the sniper, so it's probably not significantly more expensive than the ATFLIR
- the F-35 is more stealthy but for the most part it must be bacause it is better faceted.
- both aircraft use RAM and LM supposedly has developped cheaper RAM now.
- the F-35A and B have a more simple wing than the F-18.
- the F-35 has the DAS and a more sophisticated datalink but it can't account for that much difference.
- The F-35 assembly line is optimized for ~250 per year compared to ~45 per year for the F-18.

I just can't believe that it will cost that much..

Unfortunately, the things you listed are not as trivial as you think. That's what makes it a game changer on the battlefield. As far as the actual cost estimate goes, I'm not a bean counter, so I'm just going to wait and see what the contracts actually go for instead of reacting to the 'estimate of the week'.

The F-35's systems may be more complex but the F-35 will have much better economy of scale. This includes the C variant too.

And I imagine that the cousin parts of the structures of the 3 variants are built with the same machines using different programs.

I am under the impression that they think the commonality between the 3 variants will be poor, that's why they arrive to that kind of estimates.

bumtish wrote:Since you trust JET, check the link. That's the fly-away which JET I found. JET II didn't differ a lot from those. JET II are the exact numbers CAPE is based on.

http://i896.photobucket.com/albums/ac16 ... ET2008.jpg

As far as this image linked is concerned, in relation to JET estimates of "Unit Recurring Flyaway Costs" (a subset of the total 'flyaway') vs JPO estimates for the URF... it's pretty clearly shown that 1) JET is more accurately estimated of the two and 2) even the JET is conservative and underestimates the actual costs.

And ViperAll -

I find it hard to believe that the F-35 will be that expensive.

one F135 is probably not more expensive than 2 F414

Surprisingly, the single F135 - under LRIP at least - is in fact more expensive than twin F414 buys.

The F-35 assembly line is optimized for ~250 per year compared to ~45 per year for the F-18

Herein lies part of the answer. e.g., the F-35 business model from inception apparently requires the noted high build rate of 220+ units/yr, in order to achieve the said affordable scale of economy benefits. On the other hand, the Super Hornet apparently has a lower rate required 'scale of economy' point built into the business model.

So the prevailing assessment therefore is indeed suggesting higher costs per F-35 unit, due to inevitably reduced (i.e., economy of scale affecting) buy rates.