F-35 Lifetime Cost Estimates DROP 22%

[spazsinbad]

UhOh. Watch for the BIG BS story - real soon now - ya hear. Aviation Forensick Accounting at not the best.

[smsgtmac]

http://breakingdefense.com/2014/09/gao-draft-slams-f-35-on-unaffordable-costs-8-8b-over-legacy-fighters/

GAO: F-35 unaffordable 
WASHINGTON: The F-35′s long-term costs may “not be affordable” and appear to be substantially higher than those of the existing combat aircraft fleets that the Joint Strike Fighter will replace, the Government Acocuntability Office says in a draft report.

“The annual F-35 operating and support costs are estimated to be considerably higher than the combined annual costs of several legacy aircraft,” the draft says. This issue is likely to be a topic of debate at the JSF Executive Steering Board meetings to begin Thursday in Oslo, Norway. The nine countries that invested in the F-35′s development will hold bilateral meetings on Wednesday. Then they gather in the shadow of the Norwegian parliament as a group the next day.

The estimated gap between the F-35 sustainment costs and those of the F/A-18, F-15, F-16 and the Harrier fleets as measured in 2010 is impressive, about $8.8 billion, an increase of 79 percent. That estimate comes from the Pentagon’s authoritative Cost Assessment and Program Evaluation (CAPE) office, the GAO draft report says. The draft says that costs for the legacy fleet were about $11 billion a year in 2010. Based on CAPE’s estimate, the F-35′s annual costs will be $19.9 billion in 2012 dollars...

Thanks for the link but you buried the lede:

The GAO report points out throughout the draft report that CAPE estimates are substantially higher than those of the Joint Program Office, which manages the program, for almost everything to do with sustainment. The official CAPE estimate is $23 billion higher than the JPO’s. But the report says that the CAPE estimate for parts costs would be $120 billion higher than the JPO’s if “they used actual replacement rates being observed at F-35 sites.”

...And earlier in the piece, we see the GAO is still trotting out immature reliability numbers that are statistically irrelevant:

Part of the reasons behind those higher costs can be found in these numbers cited by GAO. First, mean flight hours between critical failures: “As of March 2014, this metric was averaging well below its requirements at maturity, meeting an average of 42 percent of those requirements across all three variants,” the GAO says. And mean time to repair the aircraft “is worsening,” though the report does not offer a specific figure.

Predicting future costs based upon an assumption of no reliability growth and pretending the reliability numbers are statistically significant? Typical GAO/CAPE bean-counter garbage! -Produced on six month old data to boot. As to averaging a value across all three variants with different numbers fielded and at different maturity levels/flying hour histories? Pure GAO-IGO.
I've suspected MTTR was higher than expected for a long time and mostly for one specific reason: Dollars to Donuts the MTTR standard was based upon legacy non-LO aircraft, and the delta is driven mostly by real-world cure times (we never learn--i.e. not the first LO program to do so). No matter what you do, forced or ambient cure: you gotta' let the paint dry.

Translation: CAPE/GAO are saying: Who are you going to believe? The program or our lying actual, immature data?
They might as well be climate modelers.

The 'tell' is the lack of complaint by the operators. If the F-35 was as bad as the H8ters paint it, the maintainers would be complaiing about the break rates and the meat-servos would be complaining about aircraft availability rates. All I've heard are crickets about breakage and availability.

Prediction: I predict we will find this 'draft' leak was specifically designed to poison the well as to any positive developments in the program. Of course, it's only really a prediction that history is repeating itself. Expect POGO et al to slobber all over this --it was probably leaked for their show anyway.

[edited one time for content and one time for this note, cause I REALLY screwed up the copy/paste extracts from my word doc.]

[spazsinbad]

F-35 Sustainment: Need for Affordable Strategy, Greater Attention to Risks, and Improved Cost Estimates
GAO-14-778: Published: Sep 23, 2014. Publicly Released: Sep 23, 2014

HighLights: What GAO Found
"The Department of Defense (DOD) currently has or is developing several plans and analyses that will make up its overall F-35 sustainment strategy, which is expected to be complete in fiscal year 2019. The annual F-35 operating and support (O&S) costs are estimated to be considerably higher than the combined annual costs of several legacy aircraft (see fig.). DOD has begun some cost-savings efforts and established sustainment affordability targets for the F-35 program, but DOD did not use the military services' budgets to set these targets. Therefore, these targets may not be representative of what the services can afford and do not provide a clear benchmark for DOD's cost-savings efforts. In addition, DOD has not fully addressed several issues that have an effect on affordability and operational readiness, including aircraft reliability and technical-data rights, which could affect the development of the sustainment strategy.

It is unclear whether DOD's O&S cost estimates for the F-35 program reflect the most likely costs that the F-35 program will incur. DOD has two primary F-35 O&S estimates that each total around $1 trillion over a 56-year life cycle. These cost estimates are comprehensive in that they include all DOD-required program elements and are organized according to a standard O&S cost-estimating structure; however, weaknesses exist with respect to a few of the assumptions, and the estimates did not include all analyses necessary to make them fully reliable. For example, the estimates did not use reasonable fuel burn rate assumptions that reflect the likely future F-35 fuel usage. Further, one of the estimates did not use reasonable assumptions about part replacement rates and depot maintenance. Finally, while DOD took some steps to mitigate the uncertainties inherent in cost estimates, DOD officials did not conduct key analyses to determine the level of risk associated with the estimates.

Why GAO Did This Study
The F-35 Lightning II is intended to replace a variety of existing aircraft in the Air Force, Navy, and Marine Corps, while providing the most supportable, technologically advanced, lethal, and survivable aircraft to date. The F-35 is DOD's most expensive weapon system, with estimated sustainment costs of about $1 trillion. With the military services planning for the ability to deploy and maintain the F-35 within 4 years, DOD is working to develop a sustainment strategy that will be both affordable and executable for the program's life cycle.

GAO was mandated to review DOD's F-35 sustainment planning efforts. This report addresses the extent to which DOD has (1) developed an F-35 sustainment strategy and addressed potential risks related to affordability and operational readiness and (2) developed a reliable O&S cost estimate for the program's life cycle. GAO analyzed documented plans and cost estimates and interviewed DOD and contractor officials.

What GAO Recommends
GAO recommends that DOD develop better informed affordability constraints; address three risks that could affect sustainment, affordability, and operational readiness; and take steps to improve the reliability of its cost estimates. DOD concurred with all but one recommendation and partially concurred with the recommendation to conduct uncertainty analysis on one of its cost estimates, stating it already conducts a form of uncertainty analysis. GAO continues to believe that the recommended analysis would provide a more comprehensive sense of the uncertainty in the estimates."

HIGHlights ONLY PDF: http://www.gao.gov/assets/670/666041.pdf (0.5Mb)

PDF of full report: http://www.gao.gov/assets/670/666042.pdf (5.6Mb)

Source: http://www.gao.gov/products/GAO-14-778

[smsgtmac]

My goodness. No wonder someone orchestrated the leak of the draft. To anyone who's paid attention, all they need to see this is Garbage-with-a-capital-GAO is the graphic and notes for the graphic on the first page of the summary after the title page.
1st: Notice any aircraft missing from the aircraft being replaced?
2nd: Notice the number sources for the F-35 and others? The others (I assume) apply inflation to the O&S costs but the F-35 source numbers are known to include Cost Growth Above Inflation AND O&S for all the systems it carries that the others have to put on pylons AND the F-35s costs are known to include ALIS estimates.
Can hardly wait to get off work and get past page 2 [past page 2 in critique hat is: I've been past page 2 on this one for a little while. Just need to compare my notes from an earlier 'review' with the released version for a bit .]

[neptune]

[quote="spazsinbad....

GAO was mandated to review DOD's F-35 sustainment planning efforts...

GAO recommends that DOD develop better informed affordability constraints..

. DOD concurred with all ..and partially concurred with the recommendation..

GAO continues to believe that the recommended analysis would provide a more comprehensive sense of the uncertainty in the estimates.".....

It never hurts to have someone, else, to look over your "most favored" program.

....glad to hear they can provide a more comprehensive sense of uncertainty;

here I was thinging that it was universally accepted as uncertain by 'most everyone!

...sorry Spaz!, couldn't resist.....good article!

[eskodas]

So there's

409 USN F/A-18A-Ds

238 USMC F/A-18A-Ds plus

USAF 114 F-15C/Ds and 583 F-16C/Ds plus

ANG 140 F-15C/Ds and 368 F-16C/Ds plus

AFRC 53 F-16C/Ds

99 Harrier's under USMC

total : 2004 aircraft to the F-35 at 2,457 which is 22.6% greater

[smsgtmac]

[quote="spazsinbad....

GAO was mandated to review DOD's F-35 sustainment planning efforts...

GAO recommends that DOD develop better informed affordability constraints..

. DOD concurred with all ..and partially concurred with the recommendation..

GAO continues to believe that the recommended analysis would provide a more comprehensive sense of the uncertainty in the estimates.".....

It never hurts to have someone, else, to look over your "most favored" program.

....glad to hear they can provide a more comprehensive sense of uncertainty;

here I was thinging that it was universally accepted as uncertain by 'most everyone!

...sorry Spaz!, couldn't resist.....good article!

Shack! GAO reports and the system in a nutshell.

[popcorn]

So there's

409 USN F/A-18A-Ds

238 USMC F/A-18A-Ds plus

USAF 114 F-15C/Ds and 583 F-16C/Ds plus

ANG 140 F-15C/Ds and 368 F-16C/Ds plus

AFRC 53 F-16C/Ds

total : 1905 aircraft to the F-35 at 2,457 which is 28.9% greater

Only 53 F-16s in the whole AF? What about the Harriers and A-10s?

[eskodas]

Ops, Harriers to brings it up 99 to 2004 aircraft. The F-16's followed the F-15's. AFRC is the Reserve Command. A-10s were not mentioned in the GAO as being in the 11.1 billion.

[Corsair1963]

So there's

409 USN F/A-18A-Ds

238 USMC F/A-18A-Ds plus

USAF 114 F-15C/Ds and 583 F-16C/Ds plus

ANG 140 F-15C/Ds and 368 F-16C/Ds plus

AFRC 53 F-16C/Ds

99 Harrier's under USMC

total : 2004 aircraft to the F-35 at 2,457 which is 22.6% greater

What about the over 500 USN Super Hornets??? (plus A-10's)

[geforcerfx]

F-35's Number seems way to high thought it was like 12 billion? Also why no listing the F-15e and A-10? that's another 500 unique (and expensive) airframes the F-35 will replace.

So there's

409 USN F/A-18A-Ds

238 USMC F/A-18A-Ds plus

USAF 114 F-15C/Ds and 583 F-16C/Ds plus

ANG 140 F-15C/Ds and 368 F-16C/Ds plus

AFRC 53 F-16C/Ds

99 Harrier's under USMC

total : 2004 aircraft to the F-35 at 2,457 which is 22.6% greater

What about the over 500 USN Super Hornets??? (plus A-10's)

The F-35 isn't replacing the Super hornet

[cantaz]

As far as I know, the F-35 is not formally replacing the F-15C either. Why did the GAO suggest otherwise?

If the GAO is putting the F-15C in, a related case might be made for inclusion of A-10 and SH in the cost analysis in the 2030+ timeframe.

[spazsinbad]

As always 'best to read entire post at source' but youse knew that...

GAO questions F-35 sustainment estimates
24 Sep 2014 Aaron Mehta

"...In a statement released by his office, Lt. Gen. Christopher Bogdan, the head of the F-35 JPO, thanked the GAO for its input but indicated the review missed several key points of information.

“While the current data used to compile the report is in large part accurate, many of the assumptions made by GAO in extrapolating costs over the life of the F-35 program did not reflect ongoing process improvements, or failed to account for learning and feedback that will improve efficiency of F-35 sustainment operations in the coming years,” Bogdan wrote.

Since June, Bogdan has launched two major initiatives that should drive down cost for sustainment and maintenance: putting sustainment up for competition on a global scale and the new “Blueprint for Affordability” program launched by the F-35’s corporate partners, which aims to invest $170 million in R&D to find cost reductions....

...Supporters of the F-35 have criticized both GAO and CAPE figures in recent years, noting that the agencies often used data that is a year or more behind current numbers by the time the report comes out.

For his part, Bogdan has maintained a clear line between the “old” program, with all its problems, and the “new” program that began following a 2012 rebaselining for milestones and cost estimates, in recent appearances telling critics to “get over it” and acknowledge that the JSF is largely on track since 2012.

The audit, which occurred from August 2014 to September 2014, was conducted under orders from the House Armed Services Committee, which included language stipulating a report on F-35 sustainment cost as part of the FY 2014 National Defense Authorization Act. It is unlikely that the findings will change minds on the Hill about the future of the program, however.

It is also not slowing down international partners...." [HARSH]

Source: http://www.airforcetimes.com/article/20 ... /309240078

SASC Chairman: F-35 Future ‘Fairly Strong’
24 Sep 2014 RICHARD R. BURGESS

"WASHINGTON — The chairman of the Senate Armed Services Committee (SASC) said the F-35 Lightning II joint strike fighter program is “fairly strong” and likely to reach the “finish line.”

Sen. Carl Levin, D-Mich., who is retiring from the Senate in the next few months, was answering reporter’s questions Sept. 24 at the Defense Writer Group breakfast in Washington when he responded to a question about the Senate’s confidence in the future of the F-35.

“I’d say fairly strong, provided there is no major disruption,” Levin said. “The further along it gets, although it’s limping at times, the stronger it gets, the more likely it is it will get to the finish line.”..."

Source: http://www.seapowermagazine.org/stories ... levin.html

[Corsair1963]

The F-35 isn't replacing the Super hornet

Odds are at least some Super Hornets will be replaced by F-35's. In my opinion I believe it to be highly likely.

[popcorn]

Lest we forget, add the USMC Prowlers to the list.