F-35 Acquisition Cost increases to $406.5B in new SAR

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SpudmanWP

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Unread post11 Jul 2017, 21:41

It's sad when you think that the original estimates were based on 120 F-35As per year and now it's half.

Gee, I wonder if cutting the annual buy in half could be a major driver in the lifetime cost increase? :doh:

But of course we all know it's LM's fault. :bang:
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Unread post11 Jul 2017, 22:55

Is the SAR publick yet? Everyone else seems to have it: http://www.defensenews.com/articles/air ... tion-costs
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SpudmanWP

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Unread post11 Jul 2017, 23:07

It's just more typical Washington leaks.

Here is where it will be published.

http://www.esd.whs.mil/FOIA/Reading-Roo ... n_Reports/
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XanderCrews

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Unread post11 Jul 2017, 23:09

maus92 wrote:
Looks like Gilmore was on to something (rotten in Ft. Worth.)



Missed the navy's fleet wide oxygen issues though
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Unread post11 Jul 2017, 23:11

The FloatGlobular article over page has incorrect total number which is now 2456 -not 2443- USMC want 13 more Bs BABY.
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SpudmanWP

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Unread post11 Jul 2017, 23:24

maus92 wrote:Looks like Gilmore was on to something (rotten in Ft. Worth.)


The only thing that Gilmore is on is some Mary Jane, 420, etc. The main driver of the increased estimated cost is reducing the annual F-35A buy from 80 to 60 which is HALF of the original plan. Did you note that the Development budget, which was Gilmore main area of "risk", is stable?
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Unread post11 Jul 2017, 23:56

SpudmanWP wrote:
maus92 wrote:Looks like Gilmore was on to something (rotten in Ft. Worth.)


The only thing that Gilmore is on is some Mary Jane, 420, etc. The main driver of the increased estimated cost is reducing the annual F-35A buy from 80 to 60 which is HALF of the original plan. Did you note that the Development budget, which was Gilmore main area of "risk", is stable?


Gilmore was really onto something. Like predicting a football team would win the next super bowl. Really deep prophetic stuff.
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Unread post12 Jul 2017, 03:42

Whoever uses then year numbers e.g, $406b to call out on cost increases is a financial retard. Inflation will always mean higher cost, duh. That's why there is always a base year calculation.

The BY cost has also gone up but if one bothers to look at the breaking defense writeup, the reason can be easily explained. Unit cost is lower but total procurement cost has gone up can only mean one thing. The forces are buying more planes.

Its appears some people are calling a mountain, a mountain. Of course cost will go up if one buys more planes.
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Unread post12 Jul 2017, 06:53

Some More SARin GAS before public inhales the lot - GAS Masks On... GO! FUEL sniffing not allowed - bad for future....
F-35s: Buy Less, Pay More
12 Jul 2017 John A. Tirpak

"...Winter said the F-35 program “remains within all cost, schedule, and performance thresholds and continues to make steady progress.”

The F-35’s actual operating and sustainment cost “was not estimated” by the Pentagon’s Cost Assessment and Program Evaluation shop, “and remains unchanged from 2015,” Winter noted, meaning the SAR number fails to capture actual changes in Fiscal 2016. Winter said these costs rose four percent because the Pentagon is using a new fuel estimate that increased the expected cost per gallon, along with changes “in DOD beddown plans that added more than 135,000 flight hours and 63,000 operational aircraft years to the program.” If the Pentagon hadn’t made these changes, F-35 O&S costs “would have decreased by approximately $6.2 billion (in base year 2012 dollars) from last year’s estimate.”

Source: http://www.airforcemag.com/Features/Pag ... -More.aspx
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Unread post12 Jul 2017, 09:19

What is the holdup: "...According to the 2016 Selected Acquisition Report, published in December [2016] and delivered to lawmakers Monday [10 Jul 2017]..."? https://www.dodbuzz.com/2017/07/12/air- ... cost-hike/
&
What a good reporter: "...Meanwhile, the Marine Corps plans to add 13 F-35Bs, the short-takeoff-and-vertical landing version of the Lightning II, bumping the F-35 jet buy total to 2,456 from 2,443."
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Unread post12 Jul 2017, 10:51

Two points worth mentioning here -

1) The Congress keeps adding aircraft above the services request going off of cues from the UPL. The AF may not get 60 jets this year but they'll easily get more than what they requested (HASC currently gives them 56 vs a request of 48 while SASC gives them 60). This impacts overall program since the actual aircraft purchased in a FY may be more than requested for the forceable future. If this trend continues then you would naturally not need to extend procurement for the number of years being assumed in the SAR unless the total buy is increased.

2) It provides an insight to any current or future politician on how to simply reduce 6-7% cost on the program by essentially adjusting the acquisition strategy. The OMB has directed the services to prepare for a 5% increase in budget-request for FY19. The AF will likely ask for much higher number of F-35As in their FY19 than what the SAR (it will likely be leaked today) will show since FY18 materials are using placeholders for FYDP.

3) Short-medium term, this has no impact on the budgets. The SAR basically tells the AF to prioritize and shows them and the politicians how much (estimated) can be saved by moving the procurement rate for the A higher. The AF and Congress may not choose to do this for a variety of reasons, one being allocating that money elsewhere but it will show how much can be saved by going back to what is clearly a much more cost effective acquisition strategy.
Last edited by bring_it_on on 12 Jul 2017, 12:38, edited 1 time in total.
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Unread post12 Jul 2017, 11:21

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SpudmanWP

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Unread post12 Jul 2017, 18:06

Does anyone have access to AVWeek to get the PDF?

Http://aviationweek.com/awin-only/f-35- ... report-sar

You must have an Aviation Week Intelligence Network (AWIN) account or subscribe to this Market Briefing to access "F-35 2016 Selected Acquisition Report (SAR)".
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Unread post13 Jul 2017, 02:47

Just wanted to highlight that the USMC 353 buy is reflected in many USMC program docs so its not new. Those program docs also tend to reflect a 67 C buy which ties up to the 420 total. That would have originally meant 327 C buy rather than a 340 C buy so the SAR probably does not reflect the final number, rather just the current status.

I just read the 605 page Committee of Armed Services report release July 6. Don't want to publish the link because there are a number of interesting tidbits regarding the F-35 that can probably be spunned into negative news. One key point of the SAR was the $3+m increase in the F-35A unit cost that would contribute to a significant chunk of the program increase. As per the JPO office, that assumes the program continues on at a lower annual buy rate. What the committee states to address this is also relevant. I quote:

The committee believes that full-rate production in fiscal year 2021 would require an annual procurement rate of 80 F–35As, 36 F–35Bs, and 30 F–35Cs. The committee expects the Department of Defense to invest in the tooling necessary to accelerate these future F–35 production rates.


and something that would reduce the cost further (with a plus to Trump)

The committee commends the actions taken by the administration and the F–35 PEO to negotiate lower unit costs and continued cost savings for F–35 aircraft.

To continue the trend of decreasing unit F–35 procurement costs, the committee notes that the Department of Defense submitted a request for authorization to enter into contracts for economic order quantities of material and equipment for use in F–35 procurement contracts, to be awarded during fiscal years 2019 and 2020, so that the Department of Defense can execute a block buy contracting strategy.


And on a final note, the committee recommended the following increase for the F-35 buys to
+3 to 23 for STOVL
+4 to 8 for CV
+10 to 56 for AF
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Unread post13 Jul 2017, 03:21

Just to clarify: The USMC AFAIK changed their F-35B/F-35C buy in 2015 from their original USN/USMC agreement in 2011.
Marine Aviation Plan 2015

“...The Marine Corps will procure a total of 353 F-35Bs [up from 340] & 67 F-35Cs [DOWN from 80]...” [260 USN + 67 USMC F-35Cs = 327 F-35Cs] Total USN and USMC F-35Bs [353] / F-35Cs [327] = 680"

Source: https://marinecorpsconceptsandprograms. ... 20Plan.pdf (16.4Mb)

NOW the USMC have increased their F-35B buy by 13 and thusly the overall buy for US increased by 13 to 2456 from 2443.
NOW the USMC are planning to buy 353 + 13 = 366 F-35Bs :doh: [A LEAP YEAR of F-35Bs!] :devil:
_______________________________________

Now we look at CURRENT CORRECT GRAND Totals" which in the case of the USMC F-35Bs & USN/USMC F-35Cs...
USAF =- 1,763 F-35As The 2016
USMC = -- 366 F-35Bs SAR HAS
USN =----- 327 F-35Cs WRONG
US Armed Forces TOTAL = 2,456 F-35s
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F-35totalQuantityUSsar2016textTOTAL.gif
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