Canada set to spend $9-billion on 65 US Fighter Jets - F35

[hb_pencil]

Oh and to further drive home the point... This is from a Defense Acquisition University courseware the introduction into Developing the Program Budget.
Key point:

The full funding policy, applicable to the Procurement and Military
Construction (MILCON) appropriations, is the practice of budgeting for
the total cost of major procurement and construction projects in the
fiscal year in which they will be initiated (that is, placed on contract).
The key to applying the full funding policy is estimating how many end
items will be placed on contract in each fiscal year and the associated
cost of those end items.

[SpudmanWP]

@Geo: We're both right

The $75 is then year dollars and includes the P&D and Blk Upgrades.

http://www.forces.gc.ca/site/pri/2/pro- ... on-eng.asp

[hb_pencil]

@Geo: We're both right

The $75 is then year dollars and includes the P&D and Blk Upgrades.

http://www.forces.gc.ca/site/pri/2/pro- ... on-eng.asp

Hah... never noticed that line. I'll need to do some revisions.

[geogen]

@Geo: We're both right

The $75 is then year dollars and includes the P&D and Blk Upgrades.

http://www.forces.gc.ca/site/pri/2/pro- ... on-eng.asp

$75m is 'TY' dollars??

The DND + PBO Cost comparison doc referenced says this: F-35A costs obtained from the 2009 Selected Acquisition Report and reflects 2002 dollars adjusted for inflation in the years of delivery. ?

Looking at the 2009 SAR, it does in fact clearly estimate an eventual $75m Total Flyaway cost back in CY2002 dollars.

Multiply 65 by the estimated $75m in CY2002 dollars... the remaining sum contained in the full (section 1) acquisition estimate of $6bn, ie roughly $1.125bn, would then be implied to the other sections other than aircraft acquisition listed: a) the probe and b) implementing the follow-on block IV/V upgrade?


hb:

Thanks for the diagrams, I guess... I got a slight headache trying to study them lol.

I'll just close by saying thanks for the education and opening my mind more on the topic. But in one area, I'm pretty adamant about how the original F-35 business model was designed to be successful... volume + max annual rates.

I think if you look at your own sources linked and cross reference with sources which will be due out soon, they will both reinforce the valid point found in the 2009 SAR: that Total Volume of sales do in fact help determine a Contractor's estimated unit price. It's right there in the SAR. What reduced Volume does is exactly what you cautioned about... it reduces not just the back end sales, but also the front end and the mid-end sales... hence, reduced annual rates during FRP = smaller Labor force and less than optimal efficiency = less than optimal economy of scale exploits. It probably won't be a major difference, but volume should in theory also effect how LM estimates what it can offer to it's shareholders as a plug for investing in the company. Take out volume, and investments will tend to follow in kind. Something else to consider in the overall formula on how Industry determines a best cost it can offer customers.

[SpudmanWP]

Yep, TY$ is what it says. It used the BY$2002 dollar estimates (BY = Baseline Year, aka 2002) in the 2009 SAR report and adjusted (for inflation) the total for TY$ in delivery years. It's a roundabout way of putting it, but that is what it is.

I don't have the 2009 SAR, but the 2010 one puts the FY2016 F-35As at BY$67 mil and the FY2022 F-35As at BY$64 mil.

[geogen]

Yep, TY$ is what it says. It used the BY$2002 dollar estimates (BY = Baseline Year, aka 2002) in the 2009 SAR report and adjusted (for inflation) the total for TY$ in delivery years. It's a roundabout way of putting it, but that is what it is.

I don't have the 2009 SAR, but the 2010 one puts the FY2016 F-35As at BY$67 mil and the FY2022 F-35As at BY$64 mil.

BTW, here's the TY estimates from the 2009 SAR.

https://docs.google.com/viewer?pid=bl&s ... r=30&w=722

The first couple years of DND's planned buys for FY14 and FY15 list a REC flyaway cost estimate (from the 2009 SAR) of slightly less than $80m in TY dollars, with the estimated main buys from FY16-FY20 coming in at slightly less than $75m each in TY dollars (ie $73.5m - $74.5m), according to the 2009 SAR.

Given that these referred prices are in fact only the REC Flyaway portion from the now defunct 2009 SAR estimates, it could be assumed that the remaining portion of the Total Flyaway (ie non-recurring and ancillary) would be part of DND's noted 'other acquisition costs' (along with probe and chute add-ons and block IV/V upgrades) in the section (1) estimate of $6 billion.

But as noted, the basis under which these core estimates are founded (ie the 2009 SAR report) is unfortunately now consisting of obsolete data needing further revision. For example, the USAF unit procurement size in FY14 (Canada's first buy year) will be substantially less than that estimated in the 2009 SAR.

edit: above link is to the google "Quick View" for the official PDF: www.dod.gov/pubs/.../11_F_1176_JSF_as_of_Dec2009SAR.pdf

The TY estimates should be found on page 30?

[SpudmanWP]

That link comes up as a error 400. Could you upload it to the "Program Docs" thread?

[spazsinbad]

This is the link for SAR doc: http://www.dod.gov/pubs/foi/logistics_m ... 009SAR.pdf (0.5Mb)

Attached on PGM DOC thread here:
http://www.f-16.net/index.php?name=PNph ... 160#208160

[maus92]

Canada should begin thinking about alternatives to the F-35
Perter Morton | 3-10-2012 | Toronto Star

"WASHINGTON—Although the Harper government continues to put a brave public face on its plans to buy Lockheed Martin’s Star Wars-esque F-35 Joint Strike Fighter, the reality may be that the plane is an expensive and perhaps unnecessary war toy that would do little to protect Canada’s borders."

"Besides the huge financial commitment in a still struggling global economy, from the Canadian perspective the F-35 does not seem to be a good fit for the Canadian Armed Forces.

As a replacement for the United States’ current fleet of F-16s and F-18s, the original thinking was that the stealthy, 2,000 km/h F-35 would be invaluable in a confrontation with, say, China over Taiwan. But Canada is unlikely to be involved in that kind of superpower conflict. As for monitoring and protecting the Canadian Arctic — presumably a key function for any Canadian fighter — the plane’s limited range (about 2,000 kilometres) and single engine make that problematic."

http://www.thestar.com/opinion/editoria ... o-the-f-35

[m]

Canada should begin thinking about alternatives to the F-35
Perter Morton | 3-10-2012 | Toronto Star

http://www.thestar.com/opinion/editoria ... o-the-f-35

Quote: This has not been lost on those American allies that originally committed to the F-35. Britain, Japan, Italy, Australia, Denmark, Norway, Turkey and the Netherlands have all started to either cut back their commitments or second guess the entire program.

Leaving or cutting the entire program by allies?
Probably wishful thinking by the author than a journalistic observation.

Cutting back commitments. Suppose the author is not aware of a financial crisis?


“All” started to either cut back their commitments....
When he means numbers F35? Only Italy and Denmark “officially” dropped their total numbers F35

Indeed probably some will do so, but “officially” still nothing is known about dropped numbers by other level partners.
o Norway even did raise the number F35’s: 48> 56.

o The UK: 2015, when this will be known (as far as I know)
o The Netherlands: Only a government in charge (2015), ordering the F35, has the authority what the budget will be and decides what number F35’s will be ordered (2002).
o Australia: officially, still 100 F35’s
o Canada: 65 F35’s
o Turkey: Till so far they did not drop the number F35’s

o Japan: Dropped the number F35’s!? Wasn’t aware Japan did a commitment.


Quote: While there is little doubt Canada needs to update its aging CF-18s (which are going through a $2.6 billion overhaul), the best tool for Canada to maintain and protect its borders may something far simpler and cheaper — the pilotless drone.

Till so far, a drone, as an equivalent, capacities, of the CF18 does not exist.
When such a drone will be flying, the vehicle will probably be more expensive than a piloted jet.

Or does he suggests, a RCAF with only some (simple) reconnaissance drones?
Protecting the borders with a predator? Against what? Against for instance a Russian (reconnaissance) aircraft / jet, like in Europe a few times a year?

[duplex]

http://www.defense-aerospace.com/articl ... 4200m.html

Wow! thats not good

[hotrampphotography]

http://www.defense-aerospace.com/article-view/feature/133433/f_35-unit-cost-tops-%24200m.html

Wow! thats not good

Buried half way down the article is what really matters...

While these are the projected unit costs for the LRIP 5 aircraft, there is no implication that production aircraft would cost anywhere near these amounts.

However, costs will not begin to decrease until the F-35 enters full-scale production, and this is unlikely to happen for some years yet, especially since the Pentagon has now decided to further reduction LRIP production until flight tests demonstrate that the aircraft is meeting its performance and reliability goals.

And that is why I never bother paying much attention to articles about cost at this point and time.

[maus92]

F-35 purchase not guaranteed, Fantino says
Backing out of purchase 'not as yet discounted,' says procurement minister
Laura Payton | CBC News

"Canada could reconsider an agreement to buy new F-35 joint strike fighter jets, Julian Fantino said Tuesday, as partner countries re-evaluate their own commitments.

"We have not as yet discounted, the possibility of course, of backing out of any of the program," Fantino, associate minister of national defence, told the House defence committee Tuesday.

"None of the partners have. We are not. And we’ll just have to think it through further as time goes on, but we are confident that we will not leave Canada or our men and women in uniform in a lurch, but it’s hypothetical to go any further right now."

Fantino's comments mark a change in tone from previous answers to questions about the possibility of rising costs and design problems with the Lockheed Martin fighter jets. He had previously left no possibility the government is exploring other options or considering pulling out of the agreement with allies like the United States, Norway, Italy and Australia."

http://www.cbc.ca/news/politics/story/2 ... -f35s.html

[m]

One could compare some prices, as for instance the Israeli price of the F35 with the offers to Switzerland.
Both roughly a same number jets. Plus the Israeli F35’s are not yet even full production jets.

Like to know any level partner, who possibly threatens to leave the F35 project, will be able to order a jet substantially cheaper?
Not to forget these prices are without extra needed pods, some $15 million per jet.
While the F35, most of these pods are not needed c.q. included.


According to recent newspaper reports, Dassault put forward a counter offer to supply Switzerland with 18 Rafale jets for 2.7 billion Swiss francs
instead of an original demand of 4 billion francs for 22 jets.
http://www.reuters.com/article/2012/02/ ... DK20120214

A. 22 Gripens: Swiss francs 3.1 billion = $ 3.4 billion
Per Gripen: $154.5 million

A. 22 Rafales: Swiss Francs 4 billion = $4.33 billion
Per Rafale (22): $196.8 million


B. Second probable offer by Dassault (without A2G equipment)
18 Rafales: Swiss francs 2.7 billion = $ 2923.21
Per Rafale: $162.9 million

[maus92]

Minister raises prospect of nixing controversial F-35 fighter jet purchase
Murray Brewster | The Canadian Press

(This is a dense article)

"Since declaring their intention to go with F-35, the Conservatives have doggedly defended the decision. They've dismissed calls for a reconsideration of the project and attacked critics who question the uncertain price tag.

The Harper government says the $9 billion it intends to spend on 65 of the jets is carved in stone. But the government won't see a firm price until it gets close to first delivery, which is nominally expected in 2016.

The cost for 20 years' of in-service support remains a matter of debate, with the air force insisting it will only run in the neighbourhood of an additional $7 billion — a figure the Parliamentary Budget Officer disputes.

Even Pentagon estimates suggest the maintenance bill could run between US$14 billion and US$19 billion.

In months of questioning in the Commons, Fantino has insisted there is no need for a backup plan in case of further delays in the project as the manufacturer works out software and design glitches.

On Tuesday, he told the committee he was waiting for defence officials to prepare alternate scenarios to the F-35 deal, the so-called Plan B that opposition parties have demanded.

He described the request as "what if" research.

Dan Ross, the senior defence official in charge of procurement, testified that his staff and the air force have been continuously monitoring the international aircraft market, but played down the idea that there is a lot of choice available.

"We don't see a change in what's out there," Ross said."

http://www.mysask.com/portal/site/main/ ... cachetoken