Forum: F-35 Lightning II

spazsinbad wrote:

maus92 said: "...There are non-recurring costs that are added to rec flyaway for pay for configurations specific to another buyer." Then LM should quote the proper price to these buyers. Where has this not been done?

I'm not privy to actual offers - none of use are. But we all can read the Korea Times article were LM spokesman continues to use the $65m figure. It simply does not pass the BS test when US budgeteers estimate the rec flyaway to be $83m over the term of the program, and that doesn't include country specific configurations that have to be developed and paid for - which shows up as a non-recurring cost.

Note: the referenced KT link in the above post is setting off a virus alert on my machine. May have to do with Chrome 16 browser update I just installed.

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'What specifc changes have not been factored in to an LM quote for a specific country quote' is another way to ask the same question.

maus92 wrote:

spazsinbad wrote:

maus92 said: "...There are non-recurring costs that are added to rec flyaway for pay for configurations specific to another buyer." Then LM should quote the proper price to these buyers. Where has this not been done?

I'm not privy to actual offers - none of use are. But we all can read the Korea Times article were LM spokesman continues to use the $65m figure. It simply does not pass the BS test when US budgeteers estimate the rec flyaway to be $83m over the term of the program, and that doesn't include country specific configurations that have to be developed and paid for - which shows up as a non-recurring cost.

Note: the referenced KT link in the above post is setting off a virus alert on my machine. May have to do with Chrome 16 browser update I just installed.

I believe you're looking at the Average REC cost. Foreign nations buys are specific to a certain year's lot (which is not really affected by the long term figures.) When I did the budget survey last year their numbers hit the $65 million in 2016, though that was without accounting for concurrency cutbacks. If you push back your buys to 2020 or so, then the prices should hit that price... if there are no further cost increases between now and then.

hb_pencil wrote:

maus92 wrote:

spazsinbad wrote:

maus92 said: "...There are non-recurring costs that are added to rec flyaway for pay for configurations specific to another buyer." Then LM should quote the proper price to these buyers. Where has this not been done?

I'm not privy to actual offers - none of use are. But we all can read the Korea Times article were LM spokesman continues to use the $65m figure. It simply does not pass the BS test when US budgeteers estimate the rec flyaway to be $83m over the term of the program, and that doesn't include country specific configurations that have to be developed and paid for - which shows up as a non-recurring cost.

Note: the referenced KT link in the above post is setting off a virus alert on my machine. May have to do with Chrome 16 browser update I just installed.

I believe you're looking at the Average REC cost. Foreign nations buys are specific to a certain year's lot (which is not really affected by the long term figures.) When I did the budget survey last year their numbers hit the $65 million in 2016, though that was without accounting for concurrency cutbacks. If you push back your buys to 2020 or so, then the prices should hit that price... if there are no further cost increases between now and then.

Did you post your survey on this forum, or somewhere else? When you say "their numbers," do you mean DoD numbers, or LM numbers?

hcobb wrote:

Note how the numbers are starting to decline. c.f. Death Spiral.

That's not a death spiral, which in itself is a bit of a misleading term. What people call the death spiral only appear when you produce less than 700~1000 aircraft in a total run, because learning curves can't take effect. So average per unit price increases because the more expensive early buys are more apparent. However most programs that the "death spiral" is cited are with low unit buys... like the F-22. The F-35 is a very very different beast. Even if the DoD halved its total buy, the death spiral wouldn't really be apparent because there would still be over 1,400 units purchased.

And the cuts to the LRIP units really aren't what the death spiral is about. Because of concurrency issues the Congress just doesn't want to pay for these units which might have the issues listed in the QLR, so they've postponed their buys until 2014 to 2016.

Actually, the real death spiral begins at the initiation point of any modern-day program development. As an analogy, it is how quickly it can recover from its initial flat-spin or stall (technology & engineering advancement) and initial altitude (funding priority), before possibly crashing. The Raptor just did not have enough initial altitude with the end of the Cold War (cough..).

To say a program hits a death spiral at some particular point, you must know the cost-benefit ratio, and nobody, not even Congress or the DoD has an exact figure. In a macro environment, there is no such thing. It is nothing but funding priorities and politics. Say that we buy 100+ more Raptors for even current $120 million apiece ($12 billion) and Congress is firmly set on only spending $10 billion or there will be no purchases at all and the program will be terminated. So politically, the USAF says we determine that 80 additional airplanes will be sufficient for $10 billion (sound familiar with the 600-387-187 requirements?), but Congress (umm politics) will balk. If the US kept the production line at say 15-20 aircraft/year, the price would probably drop some, but not a great amount, The learning curve is over with the R&D, just not the pricing of materials. Once the production line goes cold, thats another story.

Just curious, how long has the USG funded the R&D of aircraft. I thought during the golden years of aviation in the 50's and 60's (F100 series, etc.) that the manufacturers developed airframes with their own dollars and minimal subsidies, but I could be incorrect.I do not know how much R&D funding for the F-35 has been spent so far ($30+ billion?), but LM needs to get it together soon. Frankly, I am starting to have concerns with the development program. As historical precendence, the F-15 only took 4 years from initial flight to service entry. Sure, we can say the F-35 is so much more advanced, but the F15 was as well in its day from pure aero dynamic performance (minus the digital flight and engine control). These 20 year development cycles for airplanes are ridiculous, unless they can be so far ahead of the curve that premature obsolescense does not occur. Historically, the US has done a fine job, lets just hope that it continues.

maus92 wrote:

hb_pencil wrote:

maus92 wrote:

spazsinbad wrote:

maus92 said: "...There are non-recurring costs that are added to rec flyaway for pay for configurations specific to another buyer." Then LM should quote the proper price to these buyers. Where has this not been done?

I'm not privy to actual offers - none of use are. But we all can read the Korea Times article were LM spokesman continues to use the $65m figure. It simply does not pass the BS test when US budgeteers estimate the rec flyaway to be $83m over the term of the program, and that doesn't include country specific configurations that have to be developed and paid for - which shows up as a non-recurring cost.

Note: the referenced KT link in the above post is setting off a virus alert on my machine. May have to do with Chrome 16 browser update I just installed.

I believe you're looking at the Average REC cost. Foreign nations buys are specific to a certain year's lot (which is not really affected by the long term figures.) When I did the budget survey last year their numbers hit the $65 million in 2016, though that was without accounting for concurrency cutbacks. If you push back your buys to 2020 or so, then the prices should hit that price... if there are no further cost increases between now and then.

Did you post your survey on this forum, or somewhere else? When you say "their numbers," do you mean DoD numbers, or LM numbers?

There are two ways to see $65 million. Easiest is to look at last year's SARs for the USAF's purchase. Lets take 2020 year production estimate as our full production year. Basically dividing the number of fighters by the total REC (in then year) gives us $81.83 Million. Using a deflator to 2011 dollars brings $68 million.

You can also do it a round about way in the 2011 USAF budget request through using a learning curve formula and extrapolating for the 700th unit (or so).

hb_pencil wrote:

maus92 wrote:

hb_pencil wrote:

maus92 wrote:

spazsinbad wrote:

maus92 said: "...There are non-recurring costs that are added to rec flyaway for pay for configurations specific to another buyer." Then LM should quote the proper price to these buyers. Where has this not been done?

I'm not privy to actual offers - none of use are. But we all can read the Korea Times article were LM spokesman continues to use the $65m figure. It simply does not pass the BS test when US budgeteers estimate the rec flyaway to be $83m over the term of the program, and that doesn't include country specific configurations that have to be developed and paid for - which shows up as a non-recurring cost.

Note: the referenced KT link in the above post is setting off a virus alert on my machine. May have to do with Chrome 16 browser update I just installed.

I believe you're looking at the Average REC cost. Foreign nations buys are specific to a certain year's lot (which is not really affected by the long term figures.) When I did the budget survey last year their numbers hit the $65 million in 2016, though that was without accounting for concurrency cutbacks. If you push back your buys to 2020 or so, then the prices should hit that price... if there are no further cost increases between now and then.

Did you post your survey on this forum, or somewhere else? When you say "their numbers," do you mean DoD numbers, or LM numbers?

There are two ways to see $65 million. Easiest is to look at last year's SARs for the USAF's purchase. Lets take 2020 year production estimate as our full production year. Basically dividing the number of fighters by the total REC (in then year) gives us $81.83 Million. Using a deflator to 2011 dollars brings $68 million.

You can also do it a round about way in the 2011 USAF budget request through using a learning curve formula and extrapolating for the 700th unit (or so).

Weird. I did a different calculation of FY2020 purchases using BY2002 figures from the December SAR, and got the following:

4.624B / 80 units = 57.8M FY2002$ converted to FY2011$ = 72,685,350 It will be more expensive in FY2020$, depending upon inflation in those 9 years.

This is the cheapest year to purchase aircraft at the full rate of 80 units.

I am still having difficulty with the way LM is quoting their pricing. They need to be more specific about how they have calculated the $65M, otherwise there will always be skepticism about their pricing.

Ah, they are in Then Year (TY) for AF procurement... not BY2002 (look at the top line of the chart on 29).

I personally think its a bit understated too... then again I really don't take LM's comments at face value and rather prioritize information DoD source.

Forum: F-35 Lightning II

LM gets $4B contract for 30 F-35 LRIP-V jets