Forum: Program and politics

Pentagon cuts cost of F-35 fighters by 4 percent: sources 12 Dec 2012 By Andrea Shalal-Esa
(Reporting by Andrea Shalal-Esa in Washington and David Ljunggren in Ottawa; Editing by Jeffrey Benkoe, David Gregorio and M.D. Golan)

http://www.4-traders.com/BAE-SYSTEMS-PL ... -15591215/

"The Pentagon will pay about 4 percent less for each new Lockheed Martin Corp F-35A fighter jet when it signs a deal worth $3.8 billion with the No. 1 U.S. defense contractor on Friday, according to sources familiar with the deal.

Each of the 22 conventional takeoff and landing jets in the fifth production contract will cost around $107 million, excluding the engine, said the sources, who were not authorized to speak publicly....

....The government also expects to reach an agreement soon with Lockheed on early funding for a sixth group of F-35s, a step that could help reduce a potential $1.1 billion liability the weapons maker faced from work it had already done on the jets without a signed contract, the official said.

The final amount of the contract will be determined on Friday, since it must factor in the exchange rate of the British pound, said the official, who spoke on condition of anonymity.

The Pentagon announced on November 30 that it had reached an agreement in principle with Lockheed on the fifth production contract after a year of arduous negotiations, saying it aimed to finalize terms by the end of the year.

The contract will also pay for manufacturing support equipment, instrumentation for flight testing and other mission equipment needed for the new radar-evading warplanes..."

Bunch more details at the URL including comments about Canada. Be there.

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$107m down from $111.6m of LRIP4, beside, LRIP4 had a 7% overrun.

No, 111.6 is the predicted cost of LRIP5's purchase.

EDIT: I'm not sure. This is the SAR's Line for LRIP V

Year: 2011
Units: 22
Cost: $2715.0 million

Per unit: $123.4 million

Okay so that's the unit price. The F135 was budgeted at $15.4 million per unit, brining the cost to $122.8 million with this new contract.

4% is good news. But the reduction is in the cost of the air vehicle. The contract for the engines is still pending.

"Each of the 22 conventional takeoff and landing jets in the fifth production contract will cost around $107 million, excluding the engine, said the sources, who were not authorized to speak publicly."

http://www.foxbusiness.com/news/2012/12 ... t-sources/

maus92 wrote:

4% is good news. But the reduction is in the cost of the air vehicle. The contract for the engines is still pending.

"Each of the 22 conventional takeoff and landing jets in the fifth production contract will cost around $107 million, excluding the engine, said the sources, who were not authorized to speak publicly."

http://www.foxbusiness.com/news/2012/12 ... t-sources/

Yup, read the bottom of my post.

Lockheed Martin Corporation : Pentagon, Lockheed finalize contract for fifth lot of F-35 fighters DEC/14/2012
(Reporting by David Alexander; Editing by Will Dunham)

http://www.4-traders.com/LOCKHEED-MARTI ... -15596232/

"The Defense Department said on Friday it has finalized a contract for the purchase of a fifth batch of radar-evading F-35 fighter aircraft from Lockheed Martin Corp., a deal worth $3.8 billion for 32 of the advanced planes.

The F-35 Joint Strike Fighter is the costliest weapons program in U.S. history.

The Pentagon will pay about $107 million apiece, or about 4 percent less than the previous contract, for each of the 22 conventional takeoff and landing jets in the deal, sources familiar with the agreement said this week.

It paid $111.6 million for the Air Force version of the plane in the previous contract.

The deal, the fifth Low Rate Initial Production contract, also includes three Marine Corps versions of the plane, which can land vertically, and seven Navy models, which can be used on aircraft carriers.

"With the ... contract finalized, we look forward to completing the build of these fifth-generation aircraft and delivering them to our war fighters," said Orlando Carvalho, the Lockheed program manager for the F-35.

Loren Thompson, a defense consultant with close ties to Lockheed, said in a blog on Friday that the cost of the Air Force variant of the plane should fall to $64 million apiece by the 10th lot if the ramp-up in production unfolds as now planned."

That is it.

Latest F-35 Production Contract Keeps Program On Glide-Path To Affordable Planes 14 Dec 2012 by Loren B. Thompson Ph.D.

http://www.lexingtoninstitute.org/lates ... amp;c=1171

"...The Air Force variant, representing two-thirds of the F-35s destined for U.S. forces and virtually all of the F-35s likely to be sold overseas, will be priced at $107 million each in the fifth production lot, compared with $111.6 million in the fourth lot. The decrease apparently represents increased efficiency in building each plane rather than economies of scale, since the production rate did not increase from lot to lot....

...Assuming that the production ramp-up in the revised program unfolds as planned, the cost to build each Air Force variant of the plane should fall to $64 million in today's dollars in the tenth production lot, funded in fiscal 2016 and delivered in fiscal 2018. As with the legacy fighters in the force today, that does not include the engine, which the government procures under a separate contract. When you add up all the expenses, though, the cost of manufacturing each F-35A (the Air Force variant) five years from now looks likely to be identical to what manufacturing the latest version of a single-engine F-16 costs today. That's important because the plane was conceived mainly as a replacement of the aging F-16 -- although the F-35 will be far more survivable and versatile than the F-16...."

I'll leave youse to argue the nattynatnats out of this and spare us the 'only a mouthpiece for LM' comments. TAH. Very Happy

A few minor details with all that;
What was the F-16 Full Production Rate? I'm assuming the F-16 line isn't producing as many jets now as they did during peak FRP.
The part where jet the $65m in FY2012 dollars, compared to FY2016 dollars, probably adding on $4-5m onto the airframe cost.
Also, we don't know precisely what the "Government Furnished Equipment" will be included.

If they can get a Unit Flyaway Cost of under $90m in FY2016 for FRP, It'd be a good result.

neurotech wrote:

....
Also, we don't know precisely what the "Government Furnished Equipment" will be included....

F-135

F-35 Deal Targets Lower Price, More Shared Risk By Amy Butler 17 Dec 2012

http://www.aviationweek.com/Article.asp ... ml&p=1

"...Target per-unit airframe costs are as follows for the three variants of the Joint Strike Fighter (JSF): $105 million for the conventional-takeoff-and-landing F-35A; $113 million for the short-takeoff-and-vertical-landing F-35B and $125 million for the carrier suitable F-35C, according to Joe Dellavedova, a spokesman for the JSF program executive officer....

...The contract increases Lockheed Martin’s exposure to risk for cost overruns if they occur in building the aircraft. The company must pay 55% of any overruns up to a ceiling of 112% of the target cost, with the government picking up the remainder, Dellavedova says. The LRIP 4 contract evenly split the cost of overruns.

The Pentagon has paid $136 million in concurrency costs for LRIP deals 1-3, or about $4.86 million per aircraft.

The unlikely benefits of cost underruns are equally shared between the Pentagon and Lockheed....

...The LRIP 5 deal includes a 50/50 split on costs associated with concurrency, Dellavedova says....

...Deliveries under LRIP 5 are slated to last from August 2013-May 2014, Dellavedova says. Lockheed has delivered 20 airframes in 2012; its goal is 30. A spokesman says the final 10 are off the production line and awaiting paperwork for the formal delivery...."

Best to read the entire article at the jump.

Bee variant price actually increased a bit, comparing to last lot.

LRIP 1, $221.2 million for CTOL F-35A.
LRIP 2, $161.7 million for CTOL F-35A, $160.7 million for STOVL F-35B.
LRIP 3, $128.2 million for CTOL F-35A, $128._ million for STOVL F-35B.
LRIP 4, $111.6 million for CTOL F-35A, $109.4 million for STOVL F-35B, $142.9 million for F-35C
LRIP 5, $105._ million for CTOL F-35A, $113._ million for STOVL F-35B, $125._ million for F-35C

AvWeek's Sweetman responds to Lexington's Thompson supposition about the $64m (no engine) cost.
http://www.aviationweek.com/Blogs.aspx? ... adaa87f8d3

The official records show a somewhat higher figure for FY 2016: 2012 SAR says $83m; USAF FY 2013 budget says $80m.

Maybe he's referring to the cost of the airframe/cfe and not including cfe/e: That number is $60m for FY16. Or maybe he means the airframe/cfe cost To Complete all remaining currently programmed aircraft - which is coincidentally $64m. It would be great if he was more specific about how he arrives at his cost prediction, but unfortunately he is not being transparent.

maus92 wrote:

AvWeek's Sweetman responds to Lexington's Thompson supposition about the $64m (no engine) cost.
http://www.aviationweek.com/Blogs.aspx? ... adaa87f8d3

The official records show a somewhat higher figure for FY 2016: 2012 SAR says $83m; USAF FY 2013 budget says $80m.

Maybe he's referring to the cost of the airframe/cfe and not including cfe/e: That number is $60m for FY16. Or maybe he means the airframe/cfe cost To Complete all remaining currently programmed aircraft - which is coincidentally $64m. It would be great if he was more specific about how he arrives at his cost prediction, but unfortunately he is not being transparent.

Concur about non-transparent Sweetman's figures, and mixing up FY2012 costs with FY2016 FRP F-35 costs. Didn't we discuss this recently?

I can't imagine how he can claim $55.6m URF with engines. Each engine is ~$4m and there is two in a F/A-18. Maybe he's talking about a hypothetical Boeing "discount" for a follow-on FRP/MYP IV purchase. I still think $80m Weapon System Unit cost is appropriate price for a F/A-18F. Lower is better though Smile

More to the point. If a F-35A FY2016 actually costs under $100m Unit Flyaway cost, then we're doing well.

Here are some more numbers to mix-it-up-a-lot: [even Briganti can get it rong initially because - well - you know....]

Latest F-35 Unit Costs Now Exceed $223 million Source: Defense-Aerospace.com; published Dec. 19, 2012)
Note: the original version of this story was deleted because of editing errors in the tables, and replaced by the final version below. By Giovanni de Briganti)

http://www.defense-aerospace.com/articl ... 4223m.html

"...The JPO also released the final LRIP unit price for each of the three F-35 variants. These prices are:
-- $105 million for each of 22 F-35A Conventional Take-off and Landing (CTOL) aircraft for the US Air Force;
-- $125 million for each of seven F-35C Carrier Variant (CV) aircraft for the US Navy; and
-- $113 million for each of 3 F-35B Short Take-off Vertical Landing (STOVL) aircraft for the US Marine Corps.

These prices are expressed in BY12 dollars, and do not include the aircraft’s F-135 engine, which is procured separately.

The average unit cost of these three variants is $114.3 million, rising to $146.3 million when the cost of its engine is added. (See Table 2)..."

There is a lot more at the URL so go there if interested.

Last edited by Gums on Dec 21, 2012 - 12:22 AM; edited 1 time in total

Salute!

Well neuro, this site has what you want to know:

http://www.f-16.net/fleet-reports_article18.html

I can tell you that GD cranked out those suckers faster than anyone wanted to believe.

We were bringing 3 or 4 a week to Hill in 1980, and MacDill about the same, and then Nellis.

Unit cost went way down, and that included "spares", which isn't a new airframe but lottsa boxes and AGE.

Viper maintenance was not as harsh as for the F-4 or the F-15. If the sucker came online in the morning, it could fly 3 or 4 times that day. In one ORI we had a 24 plane squad fly over 100 missions in a day!!

If the pols don't try to save a nickel, then spend a buck later, then the numbers we are seeing for F-35 will go down per unit. We are now recouping the development $$$ and such, and will continue to see that in the unit cost for another year or two.

If Ford put out the numbers for producing 100 F-150 trucks versus thousands, then those suckers would be figured at over $100,000 each or more.

Gums sends...

Forum: Program and politics

LRIP5 - Pentagon cuts cost of F-35 fighters by 4%: sources