Forum: General F-35 Forum

ANALYSIS: F-35 LRIP 5 Contracts: Unit Cost Tops $200M for First Time
Giovanni de Briganti | Defense-Aerospace.com | March 13, 2012

"PARIS --- Previously estimated at nearly $160 million, the unit price of F-35 fighters ordered as part of the fifth Low-Rate Initial Production batch (LRIP Lot 5) has now passed $200 million, once additional contracts awarded by the Pentagon since our previous estimate on Dec. 9, 2011 are included. "

Another contract was awarded yesterday, 3/12/2012, adding an additional $56.3M to LRIP V contract totals, bringing the total to $6.3B for 30 aircraft.

http://www.defense-aerospace.com/cgi-bi ... &cat=5

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That's what happens when you cut the build from 42 to 30 after the long-lead items are already started.

And which "unit" price would this be? URF, APUC or PAUC? All are "unit" costs but each aggregates a different list of items in each.

Don't confuse them with clarity Wink

Additionally, check the source . . . Paris. Lots of Dassault, Eurofighter, and Airbus adds all over the site. Not saying it is wrong, just not impartial by any means and that it should be taken with a grain of salt.

Sufa Viper

I don't think this calculates in the right way.
But still F-35 is an expensive aircraft, drifting further away from expectation.

Lockheed wins $259 million deal for 2 more U.S. F-35s (2012-04-13) (Reporting By Andrea Shalal-Esa; Editing by Robert Birsel)

http://www.publicbroadcasting.net/woub/ ... U.S..F-35s

"WASHINGTON (Reuters) - Lockheed Martin Corp on Friday won a $259 million contract adding two more F-35 fighter jets to a fifth batch of jets being purchased by the U.S. military, boosting the size of that order to 32 jets, the Pentagon and Lockheed officials said.

Lockheed and the Pentagon are still negotiating the final terms of a fixed-price fifth production contract for the new radar-evading supersonic fighter jet, after reaching agreement in December on a $4 billion "undefinitized contract action" for 30 fighter jets.

Friday's deal, announced in the Pentagon's daily digest of major contracts, brings the size of the fifth order in line with the number funded in the Pentagon's fiscal 2011 budget. That fiscal year ended last September, but the negotiations got off to a late start.

It adds one conventional takeoff aircraft to the 21 already planned for the Air Force as part of the fifth production contract, and one carrier variant to the six planned for the Navy. The Marine Corps' total remains at three for this order...."

megasun wrote:

I don't think this calculates in the right way.
But still F-35 is an expensive aircraft, drifting further away from expectation.

This is the price you get when you divide total contract price by the number of airframes.

Unfortunately you would think that a defence site would know that these contracts cover more than just airframes and engines, in fact they even make a small tucked away mention of it with "ancillary mission equipment" and "flight test instrumentation" added into the contracts, but no break-downs of what this equipment adds to the cost is included. Nor is it explained that not every aircraft will require this. Those that do WILL be more expensive.

No-one just buys an airframe and engine. They buy maintenance equipment, tooling, publications, support etc at the same time.

Taking total contract price and dividing it by the number of airframes does NOT tell you what an airplane costs.

Especially considering that they are also buying big things like Full-Motion flight sims ($124.2 million in LRIP5) with that extra equipment.

Interestingly, USN and USAF are for whatever reason jointly changing their respective budget estimate accounting methodology for aircraft Procurement in FY13 to Exclude the Total Procurement Cost line (which used to include initial spares), and which could previously be used to figure out the annual PUC cost.

Both services are apparently using 'Gross Weapon System' cost estimate in FY13 and exclude the initial spares line as part of the Total Procurement cost estimates. This budget estimate reporting applies for both F-35 and Super Hornet procurement.

Moreover, a minor observation of interest to some perhaps is that USAF is for whatever reason lumping into the 'Total Flyaway', costs traditionally and previously added independently to a 'Support' segment of the Total Procurement Cost estimate.

And for Conan, regarding your comment about 'what an airplane costs' to acquire... (in FY13 at least)

One can extrapolate the 'initial spares' cost for FY13 given FY11 and FY12 initial spares estimates to estimate Super Hornet's (E/F) initial spares in FY13 to cost between $2-3m per F-18E/F unit (giving a Gross Unit Weapon System cost + initial spares estimate at about $85m per jet). One can extrapolate F-35's initial spares in FY13 to cost perhaps around $7m per unit (giving a Gross Unit Weapon System + initial spares estimate for FY13 F-35A at about $177m + $7m = $184m per unit Total acquisition cost). (Not including the Full mission simulators which are extra). Don't even ask what FY13 estimates are for the CV and STOVL variant.

These are based on official FY13 estimates by USAF and USN telling us 'what an airplane costs'.

God speed.

Lockheed seeks contract for fifth batch of F-35 jets by year-end 14 Sep 2012 Reuters - UK Focus

http://uk.finance.yahoo.com/news/lockhe ... 20974.html

"WASHINGTON, Sept 14 (Reuters) - Lockheed Martin Corp, the Pentagon's No. 1 supplier, on Friday said it was aiming to wrap up lengthy negotiations about a fifth batch of F-35 fighter jets by the end of the year.

Lockheed Chief Executive Robert Stevens told a Morgan Stanley investor conference that negotiations with the U.S. Defense Department were ongoing, but an agreement could be reached by the end of the year.

"I think it's possible that we can do that," Stevens said.

The contract discussions between Lockheed and the Pentagon began in December 2011 and have dragged on much longer than initially expected, with government officials insisting on extremely detailed pricing data.

Stevens gave no further details on the contract talks...

...He said Lockheed had delivered 16 of the 30 jets it was due to deliver this year, and was continuing to press for additional international orders to help drive down the overall cost of the program."

US, Lockheed talks for more F-35s move to senior level: sources By Andrea Shalal-Esa Oct 2, 2012

http://www.reuters.com/article/2012/10/ ... ss+News%29

"WASHINGTON (Reuters) - Talks between the Pentagon and Lockheed Martin Corp (LMT.N) about a fifth order of F-35 fighter planes have been elevated to a senior level as the two sides debate the last $100-million-plus dividing them, according to multiple sources familiar with the discussions.

"We're not that far apart," said one of the sources, who was not authorized to speak publicly about the negotiations, which have been underway for 10 months. "We should be able to close this. It's not intractable."...

...Senior Pentagon and Lockheed officials are always briefed on contract negotiations, but now the discussions are being held mainly at that more senior level, the sources said.

One of the key players in the talks is Navy acquisition chief Sean Stackley, whom industry executives see as a tough, but fair negotiator, who is also known for his decisiveness.

Stackley is due to take over as the senior acquisition executive on the program later this year, relieving Air Force Secretary Michael Donley. The switch will happen when Navy Vice Admiral David Venlet retires as program manager and hands the reins to Air Force Major General Christopher Bogdan, who took over as deputy F-35 program manager in August....

...Most of the issues have been resolved, but the two sides are still at odds over a little more than $100 million in costs.

Under pressure from government negotiators and shareholders, Lockheed last year reluctantly accepted terms it considered too ambitious for the fourth batch of jets, but it is resisting such terms this time around, worried that the government cost goals simply cannot be achieved and it will be left with a deficit."

Much MORE at the JUMP.

One would hope that LM takes the program's long-term future into account here. Then again, they might not care. They already made a killing off of us for development.

LRIP5; N00019-10-C-0002 LM contract number; with 9 modifications, last of on 26-Sep-12; Total value, $5,998,633,323.00 for 32 a/c and asundries (6 simulators, Hill AFB radar upgrade, etc); $187,457,291.34 per a/c. I guess they must have added tax?? Laughing

(please note that 10 STOVL a/c were cut from original order of 42 a/c)

Some numbers today October 4, 2012 L-M stock traded at $94 per share. Market capitalization is 30.22 billion yielding in round numbers about 321 million shares. The amount of LRIP-5 on the bubble is $100 million or $0.311 dollars a share or about 3/10 of one per of the value of one share. They're pushing the government for the money? In my opinion not all that smart.

Forum: General F-35 Forum

F-35 LRIP 5 Contracts: Unit Cost Tops $200M for First time