Forum: General F-35 Forum

JSF - SAR Discloses Another Three-Year Slip

Bill Sweetman at 4/3/2012 8:17 AM CDT ( http://tinyurl.com/7tnbg5v )

Excerpt:

[...] There have been rumblings over the past year about another “SDD replan”, and here it is: Another three-year slip to initial operational test and evaluation, the culmination of system development and demonstration, which now is due to be complete in 2019 – the target date is February but the threshold date is October.

The program has not made progress, it’s gone backwards: completion of IOT&E is farther off than it was two years ago. In the early 2010 restructuring, IOT&E was expected to be complete in April 2016. The services are not going to announce initial operational capability dates until next year, according to the SAR.

From a Reuters report last Friday, it appears that the main culprit is software and hardware, mainly in terms of the integration functions – sensor fusion and emission control – that take place in the fighter’s main processor banks.

Completion of IOT&E should be followed by a Milestone C full-rate production decision in April or October 2019 – but this is a misnomer, because the plans call for the program to be most of the way to full rate in the 2018 buy year. The FY18 budget is planned to fund the F-35B and C at their full 50/year rate, and the USAF will buy 60 F-35As, against an FRP level of 80. And that means committing to those 110 jets in early 2016, three years before MS-C, to get advance procurement funds into the 2017 budget.

As for the normal ten percent limit on low-rate initial production (as a fraction of total buy) the program has not merely driven a coach and horses through it, but the entire Wells Fargo Stagecoach Company. By the time the Milestone C decision is taken, 695 aircraft will be on the ramp, in production or fully funded in budgets submitted to Congress.

The financial details in the SAR are not made any clearer by two changes versus the 2010 edition: a change in the base year from 2002 (program start) to 2012, and the splitting of airframe and engine costs. On the other hand, the base-year 2012 numbers are no longer unrealistically low, and using the base-year numbers takes arguments about future inflation and the effects of delays out of the picture.

In what follows, I’m going to use average procurement unit cost (APUC) because I am a taxpayer and that’s the bottom line (literally) in procurement budgets. Unit recurring flyaway is the lowest cost, but neither the US nor anyone else can put an aircraft on the ramp for that money. And all numbers are base-2012 unless otherwise indicated.

Some findings: One of my contacts predicted in 2010 that it would be 2015 (buy year) before the F-35A cost less than the last F-22s. Shacked! The APUC for the F-35A in 2013-14 is $184-$188 million, versus $177m (2009 dollars) for the last F-22s. And that is at a much higher production rate, when F-35Bs and Cs are included.

And let's kill the "same price as an F-16 in FRP" meme. If all goes perfectly according to plan, an F-35A delivered eleven years hence, at full rate, will have an APUC tag of $89 million. A Super Hornet today is $81 million, and it's a 50 percent larger airplane than an F-16.

What about the frugal, do-more-with-less Marines? At full rate, the F-35B costs $138 million in 2018, versus $117 million for the F-35C. That’s nearly 80 percent of the price of the last batch of F-22s – you remember, that extravagantly expensive toy for the white-scarf air force – but coming off a 110-per-year line. What would have been the F-22 price at 40 per year, rather than 20?

Finally, all the kerfuffle around the $1.5 trillion program life-cycle obscures the central component of that calculation, which is cost per flying hour. Although the basis of the numbers has been changed, the SAR still compares the F-35A with the F-16, and shows that the estimated CPFH for the F-35A has gone from 1.22 F-16s in the 2010 SAR to 1.42 today – versus 0.8 F-16s, which was being claimed a few years ago. Where is that operations and support money going to come from?

The SAR predictions also rest on several big assumptions.

The first is that the F-35 procurement program will grow from $7.6 billion in FY15 to $13.1 billion in FY21, increasing by $950 million per year. In view of the US fiscal climate, the fact that Obama is still likely to be writing the FY16 and FY17 budgets (the latter including advance procurement for FY18), the USAF tanker and bomber programs and the reorientation towards Asia, this assumption is, to say the least, a little rosy in its tint.

Second, if you look at the forecast changes in F-35A unit costs, there is a 22 percent drop in APUC between FY16 (48 USAF jets) and FY18 (60 USAF jets) although the buy goes up by a quarter. But between FY18 and FY21 the USAF buy increases by one-third -- and the unit cost comes down by less than 8 percent. The explanation, almost certainly, is that the plan assumes large volume partner buys by FY17/18.

Finally, everything in the SAR rests on "if everything goes to plan from now on", which, so far, it hasn’t.

F-16.net Sponsor

Already repeated earlier here with link to SAR PDF:

Lockheed Martin Statement on 2011 F-35 Selected Acquisition
http://www.f-16.net/f-16_forum_viewtopic-t-18933.html
&
Repeated again:
F-35 SAR [Selected Acquisition Report] 'As of December 31, 2011' from Aviation Week:

http://www.aviationweek.com/media/pdf/F ... 9-2012.pdf (700Kb)

JSF - SAR Discloses Another Three-Year Slip by Bill Sweetman at April/3/2012

http://www.aviationweek.com/aw/blogs/de ... d=blogDest

If I'm reading the article correctly, the IOC-date continues to recede into the future ~2019, and the USAF will be forced to spend huge sums on upgrading and repairing the pre-existing LRIP fleet. It looks like there will be 695 LRIP mistake jets that will be built prior to IOC and all of them will need to be "fixed." Sooo... we will have almost 700--darn near and entire airforce--of squadron dogs right out of the chute.

AND, the money for fixing the squadron dogs is going to come out of the buy, so there is no way we can buy all the jets as planned. Not buying all the jets means the price per jet is going to go up--way up--and all of that is coming out of the buy. This is a death spiral.

AND, according to the Concurrency QLR there are technical mountains to cross and vast oceans of code to write...

AND, the SAR compares the F-35A with the F-16, and shows that the estimated CPFH for the F-35A has gone from 1.22 F-16s in the 2010 SAR to 1.42 today – versus 0.8 F-16s, which was being claimed a few years ago. Who going to pay for that?

I know it make people angry to mention these things, but guys, the barn is on fire. But beyond having common sense and the ability to reason, I'm new to this so attack away!

Al

1. On the IOC Date, no it is not > 2019. The SAR specifically states that the services have not set the date and they will likely determine and announce the date in 2013. 2019 refers to the FRP (Full Rate Production) date.

2. LRIP jets that are built as Blk3 will not have to upgraded, they are already Blk3. While there may be minor modifications, the majority of the work is done.

3. "the barn is on fire" is the tone of a typical BS article

Last edited by sufaviper on Apr 05, 2012 - 01:14 AM; edited 1 time in total

You are reading Mr. Sweetman's interpretation of the SAR correctly, you are not reading the SAR correctly.

IOC is unnounced currently, IOE&T is pushed out to 2019, but I am going to predict right now that this date will actually come back. The F-35 fleet put up the highest monthly numbers in March (and that beats last October with all the short Wasp flights) and the program is now officially 25% through the Flight test phase with plans to tick off 20% a year over the next few years, so by the end of 2012, around 35% of flight test will be completed.

Additionally with jets arriving for IOE&T this summer and more to come soon their after I think it is very possible that the 2019 date will finish sooner.

Finally if you need proof of Mr. Sweetman's extreme bias against the F-35, look at his respons on page 8 of the comments. A commenter brought up the cracks in the PAK-FA and Mr. Sweetman blew him off completely, while he reemed the F-35 for a crack in a ground test article after many more flight hours.

Sufa Viper

avxva wrote:

JSF - SAR Discloses Another Three-Year Slip

If all goes perfectly according to plan, an F-35A delivered eleven years hence, at full rate, will have an APUC tag of $89 million. A Super Hornet today is $81 million, and it's a 50 percent larger airplane than an F-16.

Such tag sounds ... awesome, as F-35A is also 50% larger than F-16.
Except the "eleven years" part.

The complexity in all of this is ridiculous. It's impossible for a college-educated person (post-graguate degree no-less) to understand the press reports and articles about the F-35, much less the actual F-35 program. This is crazy. The program accounting is so not GAAP, the acronyms are out of control, the lingo used to describe the development and procurement program is beyond comprehension.

Simple question: What news, what report that comes out in the future, will make a negative impression to the members of this list? What will it take for the members of this forum to back away and take a second look at the wisdom of buying the F-35?

Al

Last edited by 1st503rdsgt on Apr 05, 2012 - 02:31 AM; edited 1 time in total

avxva wrote:

The complexity in all of this is ridiculous. It's impossible for a college-educated person (post-graguate degree no-less) to understand the press reports and articles about the F-35, much less the actual F-35 program. This is crazy. The program accounting is so not GAAP, the acronyms are out of control, the lingo used to describe the development and procurement program is beyond comprehension.

Simple question: What news, what report that comes out in the future, will make a negative impression to the members of this list? What will it take for the members of this forum to back away and take a second look at the wisdom of buying the F-35?

I've shared your pain for a long time, but when one boils away all the fanboy rhetoric and *shock value* numbers, you still end up with two simple facts that you can interpret any way you want.

1. Delayed as it is, the F-35 will still be available in numbers decades before any other aircraft of comparable capability or any defensive system able to seriously threaten it.

2. The program is badly over-budget, yes; but the development money has already been spent and isn't coming back. Flyaway costs are all that really matter now.

avxva wrote:

The complexity in all of this is ridiculous. It's impossible for a college-educated person (post-graguate degree no-less) to understand the press reports and articles about the F-35, much less the actual F-35 program. This is crazy. The program accounting is so not GAAP, the acronyms are out of control, the lingo used to describe the development and procurement program is beyond comprehension.

Simple question: What news, what report that comes out in the future, will make a negative impression to the members of this list? What will it take for the members of this forum to back away and take a second look at the wisdom of buying the F-35?

Al

If you can prove that there is a better option than what they are doing now, or a better way than how they are corrupting/wasting resources now.

From project managing perspective, delay and cost-overrun are just common...
Take a look on any new weapon system developing, this project is not best controlled, those are sad news, but it's not the worst. There are projects like Arjun tank which cost 40 years. Predicting future is difficult. And other reasons like budget cut, requirement changes, etc. also delays it.

avxva wrote:

l

Quote mr. Sweetman: The APUC for the F-35A in 2013-14 is $184-$188 million, versus $177m (2009 dollars) for the last F-22s.

May be you don’t have noticed, but mr. Sweetman did place an early production aircraft versus an aircraft last in production

Quote mr. Sweetman: And that is at a much higher production rate, when F-35Bs and Cs are included.
Although some 80% in common, these aircraft in fact are three different aircraft types

Quote B.S.: If all goes perfectly according to plan, an F-35A delivered eleven years hence, at full rate, will have an APUC tag of $89 million. A Super Hornet today is $81 million

Basically the F18 is a design from the sixties and quite a long time in production.

When the F35 reaches a figure of $89 million versus an F18 that long in production and only $8 million cheaper ..... well.

Although, how much will an F18 cost when the F35 is in full production? Assume raised in price.

avxva wrote:

Simple question: What news, what report that comes out in the future, will make a negative impression to the members of this list? What will it take for the members of this forum to back away and take a second look at the wisdom of buying the F-35?

For starters the article needs to be written by someone who matters and has internal information. People like Sweetman, ELP, Goon and a few others are not reporters, they are lobbyists with their own agendas and more than a couple of them appear a little bit unstable (refer to Sweetman's TR-3B crusade, Goon's last submission to Aus defence which came across as the ranting of a crazy man and ELP's blog)

You have the wrong idea on who the zealots on this site are though. Most people are not die hard "ZOMG F-35 is the GREATEST!!" fans on this site, they are people who are watching the program with interest or are interested in the technology. Despite the claims of every ABJ that has passed through this site, most are intelligent people who are able to think for themselves.

Your post explained why these people take exception to posters like yourself and generally ignore anything you write. Your last question comes across like this "What does it take to break you people?!?!".

So much can be read into your comment.
a) you a sure you're right
b) you can't understand why everyone else doesn't share your opinion
c) you think everyone who doesn't share your "correct" opinion is irrational
d) your purpose here is to try to convert people to your opinion and those who can't be converted are zealots

Surely you can see if that really is your motive and the way you think, maybe a visit to Dr Phil is in order.

megasun wrote:

this project is not best controlled, those are sad news, but it's not the worst.

True, a look at the US DoD project updates last year showed that JSF was actually about number 15 out of 40 for % over budget.

The excalibur gps guided artillery round was the worst at something like 250% over budget.

avxva wrote:

The complexity in all of this is ridiculous. It's impossible for a college-educated person (post-graguate degree no-less) to understand the press reports and articles about the F-35, much less the actual F-35 program. This is crazy. The program accounting is so not GAAP, the acronyms are out of control, the lingo used to describe the development and procurement program is beyond comprehension.

There are several types of degrees that could be useful. These are some that are represented here:

Government budget/accounting professional
Defense Management professional
Military pilot
Defense strategist/policy analyst
Engineer (aerospace related)

Each has their own area of expertise, and you see a lot of good information from people who are involved in one or two of those areas.

avxva wrote:

Simple question: What news, what report that comes out in the future, will make a negative impression to the members of this list? What will it take for the members of this forum to back away and take a second look at the wisdom of buying the F-35?

Al

I actually find this kinda insulting. By the nature of my job and position, I must attempt to be impartial. Someone like Sweetman does not. I try to understand procurement and how the government operates. I've also got a lot of history that helps me put a program like this into context. I think alot of us know what is a bad program, one that needs a bit of assistance, and those that meet a standard of excellence.

What would make me concerned? I think if the REC goes above 90 million I'd start to look at other programs. I'd also be a bit concerned if there was a very serious issue with the aircraft's maneuverability and structure. However by each passing test flight those ease slightly. To me throwing quotes around about how its going to be 1.4 to 1.5 trillion over 50 years really tells me nothing at all and using those figures really helps to confuse the debate rather than inform it. I'm more concerned about the year to year costs and projections for the next five years as that tells me quite a bit about the costs and their effect on the government's budget.

avxva wrote:

The complexity in all of this is ridiculous. It's impossible for a college-educated person (post-graguate degree no-less) to understand the press reports and articles about the F-35, much less the actual F-35 program. This is crazy. The program accounting is so not GAAP, the acronyms are out of control, the lingo used to describe the development and procurement program is beyond comprehension.

Al

Just a short comment about the accounting side and U.S. GAAP.

It is kinda pointless to say that since the numbers reported do not follow GAAP something is wrong with them. They can use whatever method they wish as long as the Government agencies they report to (DOD, ect.) are ok with it. In-fact, the agencies that the program reports to likely developed the methods in use. The only place GAAP needs to be followed is on the financial statements that Lockheed reports to the SEC.

Even if the program did completely follow GAAP it wouldn't be very useful. There is a good reason why companies rarely follow U.S. GAAP for their managerial accounting books. U.S. GAAP is not a very good tool to use to look into the future and plan with. It is more of a tool to report what did happen using real historical numbers. People can and do use this to look into the future. However, it is very difficult to try to plan the next 10 years of a program with any accuracy with what happened last year.

Finally, the language used in the reports are geared to who they report to. If the DOD is comfortable with the amount of acronyms it's fine. If Lockheed is gearing their report to the general public then that is not okay.