F-35A Price in 2020 in Today Dollars ($85=$75 Million) USG

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spazsinbad

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Unread post22 Jun 2013, 03:38

F-35 – ‘cautiously optimistic’ at the tipping point for programme 20 Jun 2013
"F-35 – turned a corner? (Lockheed Martin)

“We’re not declaring victory just yet” said Lockheed Martin’s VP Steve O’Bryan of the new “cautiously optimistic” (as described by Pentagon procurement chief) outlook that infuses the F-35 Joint Strike Fighter project. However it was clear in a presentation to the aviation media at Le Bourget that things were now starting to go in the troubled fighters direction – the good news said O’Bryan meant the programme was at ‘a tipping point’. With 65 F-35s now flying, flight testing is ramping up quickly, with 50% of all flight tests done in the past 12 months.

In addition, both the US Government and the GAO had confirmed that concurrency was starting to pay off – and the flyaway cost (including engines) was dropping. In 2020 the US Government estimates that a F-35 will cost some $85m each or less than half of the 2009 initial examples cost. Adjusted to today’s dollars the 2020 price would be $75m each.

However, O’Bryan was frank in admitting that challenges still persist – especially in the software. The F-35 computer software has around 8.6 million lines of code (in comparison an F-22 has around 2 million). While 88% of the code is now flying, the remaining 12% is the most difficult part, explained O’Bryan as it integrates existing simpler functions and capabilities together into a whole."

http://media.aerosociety.com/aerospace- ... ay-3/8298/
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spazsinbad

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Unread post23 Jun 2013, 09:11

"What is the cost of an F-35? How is that cost determined?

The estimated cost for an F-35A conventional take-off and landing (CTOL) aircraft purchased in 2018 and delivered in 2020 (the first expected year of full rate production) will be about $85 million in inflation adjusted “then year” dollars. This is equivalent to about $75 million in 2012 dollars. That price includes the airframe, engine, mission systems, profit and concurrency.

F-35 unit recurring flyaway (URF) costs have been going down with each successive lot of aircraft. Lockheed Martin and Pratt & Whitney have track records for delivering the airframe and engine below government SAR estimates and we expect this trend to continue in the future.

This Joint Program Office average unit recurring flyaway (URF) calculation is based on the 2011 Selected Acquisition Report (SAR) to Congress and derived from actual F-35 cost on early production lots. These URF calculations take credit for learning from projected U.S. and international F-35 quantities (716 International/2,443 U.S. DoD).
___________________________

What is full-rate production, and how does the overall production strategy affect the cost of the program?

Full-rate production of the F-35 Lightning II will be a pace of more than 200 jets per year, or about one completed each working day. At this volume, all F-35 customers benefit from economies of scale in both aircraft price, and in providing components and systems."

https://www.f35.com/resources/faqs/category/all/30
Last edited by spazsinbad on 23 Jun 2013, 09:35, edited 1 time in total.
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lookieloo

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Unread post23 Jun 2013, 09:25

Anyone know what that is in 2005 dollars?
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USMilFan

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Unread post23 Jun 2013, 10:00

lookieloo, using consumer price index as a proxy for general inflation, $75m in 2012 adjusts to almost $65m in 2005.
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Unread post23 Jun 2013, 10:15

USMilFan wrote:lookieloo, using consumer price index as a proxy for general inflation, $75m in 2012 adjusts to almost $65m in 2005.
Ahhhh... "65 million dollars." I just had to say it out loud to believe it. That's pretty close to what LM was saying back then.
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smsgtmac

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Unread post24 Jun 2013, 01:48

USMilFan wrote:lookieloo, using consumer price index as a proxy for general inflation, $75m in 2012 adjusts to almost $65m in 2005.


In this case, it doesn't make too huge a difference because the years are close and measured inflation during the time was low, but for a program like the F-35, we ought to use Economy Cost assumptions instead of CPI for adjusting for the timeframe. $75M in 2012 is $60.4M in 2005 by the Economy Cost method.

I only bring this up because inevitably the timeframes grow larger and errors would be significant using the CPI in those cases. A good resource is the Measuring Worth website for quick estimates and guidance in using different measures appropriate to that being measured: http://www.measuringworth.com/ppowerus/
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lookieloo

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Unread post24 Jun 2013, 08:49

smsgtmac wrote:
USMilFan wrote:lookieloo, using consumer price index as a proxy for general inflation, $75m in 2012 adjusts to almost $65m in 2005.
In this case, it doesn't make too huge a difference because the years are close and measured inflation during the time was low, but for a program like the F-35, we ought to use Economy Cost assumptions instead of CPI for adjusting for the timeframe. $75M in 2012 is $60.4M in 2005 by the Economy Cost method
Even better. :D I suppose the only bad news is that we'll have to wait for all this to be proven out, leaving plenty of time yet for more disinformation.
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XanderCrews

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Unread post25 Jun 2013, 20:29

Its not "check mate" yet... but its within sight. as the price gets more firm and the light at the end tunnel gets closer it will be fun to watch the detractors
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Unread post26 Jun 2013, 00:52

smsgtmac wrote:
USMilFan wrote:lookieloo, using consumer price index as a proxy for general inflation, $75m in 2012 adjusts to almost $65m in 2005.


In this case, it doesn't make too huge a difference because the years are close and measured inflation during the time was low, but for a program like the F-35, we ought to use Economy Cost assumptions instead of CPI for adjusting for the timeframe. $75M in 2012 is $60.4M in 2005 by the Economy Cost method.

I only bring this up because inevitably the timeframes grow larger and errors would be significant using the CPI in those cases. A good resource is the Measuring Worth website for quick estimates and guidance in using different measures appropriate to that being measured: http://www.measuringworth.com/ppowerus/

You want to see something nifty? Put in the 1975 price of the F-16 and see what the Economy Cost comes out to today. :D
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Unread post28 Jun 2013, 23:33

First F-35C Carrier Version Reports for Training Duty at Eglin AIN 28 June 2013 Chris Pocock
"...Affordability is a key issue for the F-35 program. “We’re on path to achieve an $85 million unit recurring flyaway cost (URFC) for the F-35A by 2020,” O’Bryan declared. That figure is in then-year dollars–the current-year equivalent would be $75 million. However, the F-35As being procured in Fiscal Year 2013 are actually costing $140 million each; there will be a steep decrease in the URFC over the next few years. The URFC includes the aircraft, engine, mission systems and an allowance for concurrency costs...."

http://ainonline.com/aviation-news/ain- ... duty-eglin
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Unread post05 Jul 2013, 11:26

smsgtmac wrote:...but for a program like the F-35, we ought to use Economy Cost assumptions instead of CPI...


smsgtmac, as a purely theoretical matter, I will concede to you that applying economy cost assumptions is preferable when formulating projected values for F-35 planning and analysis. But I must point out that, as a purely technical matter in this instance, it is not at all clear whether or not we should use economy cost assumptions for the specific purpose of discounting $75m in 2012 back to 2005. If we could be sure that economy cost assumptions were applied to arrive at the original $85m projected cost for 2020, then by all means, we should remain consistent with the original assumptions used to arrive at the $85m figure. If, however, economy cost assumptions were not used to estimate the $85m figure, we are safest to assume that only inflation was considered when formulating $85m, and therefore, only inflation should be considered as we discount to earlier periods, whether for 2012 or 2005.

Naturally, such fine technical points are of some interest to technicians like you and me, smsgtmac. But we should not expect the average forum poster to be so keenly interested in such matters. I fear that our discussion is rapidly approaching the bounds of the “absurdity principle,” and we should probably drop the matter shortly.

But I cannot be as understanding with our media, which shows absolutely no comprehension of these matters. As I’m sure you’re aware, smsgtmac, the media’s mindless frothing over trillion-dollar-failure-for-F-35 stories amply proves its utter ignorance in such matters. Rather than showing an iota of intelligence, the media seems to prefer sticking with its usual box-of-rocks mentality in its reportage of all things F-35. I must commend hbpencil for remaining one of those very few journalists who actually comprehends the finer points of such issues.

Regardless of how we treat the fine points, the $85m figure is most encouraging. But as always, it remains to be seen if LM can achieve it by 2020. The really good news is that the $85m amount implies that the program’s cumulative average unit cost will likely fall below $85m since the bulk of F-35 production lies beyond 2020. That is when costs are expected to continue falling below $85m as both learning and economies of scale are expected to impact costs. Cumulative average unit cost remains the true acid-test measure of the program’s ability to control costs.
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FlightDreamz

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Unread post05 Jul 2013, 14:45

Once <b><i>production</i></b> F-35 Lightning II's start cranking off the assembly line THAT"S when we'll start to see if Lockheed-Martin can live up to some of it's sales people hyperbole. But until then it's all speculative (and I very much look forward to when the F-35's do complete their testing and development phase - debugging all that software code has to be a real <b>@#$%</b>)!!!!
And <b>USMilFan</b> brought up some excellent points about inflation and media bias, nicely put sir I look forward to seeing more posts on F-16.net in the future. :thumb: I find myself unable to disagree with anything in your last statement....
A fighter without a gun . . . is like an airplane without a wing.— Brigadier General Robin Olds, USAF.
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Unread post05 Jul 2013, 17:38

FlightDreamz wrote:Once <b><i>production</i></b> F-35 Lightning II's start cranking off the assembly line THAT"S when we'll start to see if Lockheed-Martin can live up to some of it's sales people hyperbole. But until then it's all speculative (and I very much look forward to when the F-35's do complete their testing and development phase - debugging all that software code has to be a real <b>@#$%</b>)!!!!
And <b>USMilFan</b> brought up some excellent points about inflation and media bias, nicely put sir I look forward to seeing more posts on F-16.net in the future. :thumb: I find myself unable to disagree with anything in your last statement....

Don't you mean "Full Rate Production" F-35s. As I understand LRIP 8 will be the last LRIP batch.
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Unread post05 Jul 2013, 22:28

<b>neurotech</b>
Don't you mean "Full Rate Production" F-35s.

Yes I definitely meant Full Rate Production F-35's (thanks for correcting the oversight). I think they have the H.M.D. problems under control. And MANY aircraft go through upgrades and change drastically over their lifetime (the F-16A to today is the perfect example as has already been mentioned). But I just want to see some results for all the money that's been thrown at this. I still have some books from (-gasp-) Bill Sweetman and the Nova: Battle of the X Planes on DVD when he actually had <i>nice</i> things to say about the F-35! Yes THAT long ago! :)
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Unread post06 Jul 2013, 02:05

FlightDreamz wrote:
<b>neurotech</b>
Don't you mean "Full Rate Production" F-35s.

Yes I definitely meant Full Rate Production F-35's (thanks for correcting the oversight). I think they have the H.M.D. problems under control. And MANY aircraft go through upgrades and change drastically over their lifetime (the F-16A to today is the perfect example as has already been mentioned). But I just want to see some results for all the money that's been thrown at this. I still have some books from (-gasp-) Bill Sweetman and the Nova: Battle of the X Planes on DVD when he actually had <i>nice</i> things to say about the F-35! Yes THAT long ago! :)

I just saw an old "Future of Air Combat" or some-such where Sweetman was speaking to the importance of information and awareness, and how much the F-35 would be taking advantage of it. Of course, this was while the Comanche was still a viable program.
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