60 F-35 for South Korea

seruriermarshal · by **seruriermarshal** » 03 Apr 2013, 23:37

Korea – F-35 Joint Strike Fighter Aircraft

WASHINGTON, April 3, 2013 – The Defense Security Cooperation Agency notified Congress March 29 of a possible Foreign Military Sale to the Government of Korea for 60 F-35 Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft and associated equipment, parts, training and logistical support for an estimated cost of $10.8 billion.

The Government of the Republic of Korea has requested a possible sale of (60) F-35 Joint Strike Fighter Conventional Take Off and Landing (CTOL) aircraft. Aircraft will be configured with the Pratt & Whitney F-135 engines, and (9) Pratt & Whitney F-135 engines are included as spares. Other aircraft equipment includes: Electronic Warfare Systems; Command, Control, Communication, Computer and Intelligence/Communication, Navigational and Identification (C4I/CNI); Autonomic Logistics Global Support System (ALGS); Autonomic Logistics Information System (ALIS); Full Mission Trainer; Weapons Employment Capability, and other Subsystems, Features, and Capabilities; F-35 unique infrared flares; reprogramming center; F-35 Performance Based Logistics. Also included: software development/integration, aircraft ferry and tanker support, support equipment, tools and test equipment, communication equipment, spares and repair parts, personnel training and training equipment, publications and technical documents, U.S. Government and contractor engineering and logistics personnel services, and other related elements of logistics and program support. The estimated cost is $10.8 billion.

This proposed sale will contribute to the foreign policy goals and national security objectives of the United States by meeting the legitimate security and defense needs of an ally and partner nation. The Republic of Korea continues to be an important force for peace, political stability, and economic progress in North East
Asia.

The proposed sale of F-35s will provide the Republic of Korea (ROK) with a credible defense capability to deter aggression in the region and ensure interoperability with U.S. forces. The proposed sale will augment Korea’s operational aircraft inventory and enhance its air-to-air and air-to-ground self-defense capability. The
ROK’s Air Force F-4 aircraft will be decommissioned as F-35’s are added to the inventory. Korea will have no difficulty absorbing these aircraft into its armed forces.

[...]

Source: http://www.dsca.mil/pressreleases/36-b/ ... _13-10.pdf

weasel1962 · by **weasel1962** » 03 Apr 2013, 23:42

What struck me was the significant contract price difference between F-15SE and F-35A in the Korean competition. For anyone in a procurement department, justifying a 400% price difference against the lowest bid is highly difficult. It may take a political intervention for LM to win this comp.

F-15SE - US$2.4b for 60
http://www.dsca.mil/PressReleases/36-b/ ... _13-11.pdf

F-35A - US$10.8b for 60
http://www.dsca.mil/PressReleases/36-b/ ... _13-10.pdf

hb_pencil · by **hb_pencil** » 03 Apr 2013, 23:43

It does not mean they have purchased it yet. Its still in competition with the other fighters. This is just a notice that they might buy them... the same goes for the Silent Eagle.

http://www.dsca.mil/pressreleases/36-b/ ... _13-11.pdf

weasel1962 · by **weasel1962** » 03 Apr 2013, 23:51

The below extract from DN's report on the comp may explain why the contract price of the F-15SE is so low.

http://www.defensenews.com/article/2013 ... |FRONTPAGE

In contrast, the Silent Eagle would be sold via a combination of FMS and direct commercial sale (DCS) from Boeing to the South Korean military. The DSCA announcement listed a price of $2.4 billion for 60 of the modified F-15s; however, that number only covers the FMS portion of the deal. It is unknown at this time how much that total will raise.

spazsinbad · by **spazsinbad** » 04 Apr 2013, 00:17

Another earlier discussion about the same original info above is ongoing here:

http://www.f-16.net/f-16_forum_viewtopi ... t-165.html

hornetfinn · by **hornetfinn** » 04 Apr 2013, 10:32

weasel1962 wrote:What struck me was the significant contract price difference between F-15SE and F-35A in the Korean competition. For anyone in a procurement department, justifying a 400% price difference against the lowest bid is highly difficult. It may take a political intervention for LM to win this comp.

F-15SE - US$2.4b for 60
http://www.dsca.mil/PressReleases/36-b/ ... _13-11.pdf

F-35A - US$10.8b for 60
http://www.dsca.mil/PressReleases/36-b/ ... _13-10.pdf

It seems to me that the F-15SE notification only includes support and equipment for those 60 F-15s, not the aircraft themselves which would be bought directly (DCS sale). We would need the price of the DCS deal for those aircraft to have any meaningful comparison. Of course the FMS notification cost information is not the real value of the deal, but rather to inform about what the value of the deal could be. Usually the real value of the deal is lower than the FMS notification.

bigjku · by **bigjku** » 04 Apr 2013, 12:56

hornetfinn wrote:It seems to me that the F-15SE notification only includes support and equipment for those 60 F-15s, not the aircraft themselves which would be bought directly (DCS sale). We would need the price of the DCS deal for those aircraft to have any meaningful comparison. Of course the FMS notification cost information is not the real value of the deal, but rather to inform about what the value of the deal could be. Usually the real value of the deal is lower than the FMS notification.

One could make a pretty educated guess about the full cost of the F-15's given what we know about the K (which was 100 million a pop). It really depends on how much modification work is done to really make the Eagle stealthy.

You have to assume that much of that $40 million an aircraft in equipment replaces stuff that was part of the F-15K (radars ect) so that actually brings the price down. My guess is that it is added back by the SE modifications.

I think a reasonable price range depending on the extent of stealth modifications done is anywhere from $130-160 million a pop with the added risk that you likely can't be 100% sure about the final cost since Boeing has not built the thing yet.

maus92 · by **maus92** » 04 Apr 2013, 18:11

bigjku wrote:One could make a pretty educated guess about the full cost of the F-15's given what we know about the K (which was 100 million a pop). It really depends on how much modification work is done to really make the Eagle stealthy.

You have to assume that much of that $40 million an aircraft in equipment replaces stuff that was part of the F-15K (radars ect) so that actually brings the price down. My guess is that it is added back by the SE modifications.

I think a reasonable price range depending on the extent of stealth modifications done is anywhere from $130-160 million a pop with the added risk that you likely can't be 100% sure about the final cost since Boeing has not built the thing yet.

Unnamed sources are saying that the cost of the full up F-15SE(isn) tender will be less than F-35.

bigjku · by **bigjku** » 04 Apr 2013, 18:29

maus92 wrote:
bigjku wrote:One could make a pretty educated guess about the full cost of the F-15's given what we know about the K (which was 100 million a pop). It really depends on how much modification work is done to really make the Eagle stealthy.

You have to assume that much of that $40 million an aircraft in equipment replaces stuff that was part of the F-15K (radars ect) so that actually brings the price down. My guess is that it is added back by the SE modifications.

I think a reasonable price range depending on the extent of stealth modifications done is anywhere from $130-160 million a pop with the added risk that you likely can't be 100% sure about the final cost since Boeing has not built the thing yet.

Unnamed sources are saying that the cost of the full up F-15SE(isn) tender will be less than F-35.

I think someone calculated the F-35 one as being around $180 million per aircraft. The real question for the ROK is two fold.

1. Is the difference material for the value of each aircraft?
2. Do they consider some portion of the F-35 cost that would be non-recurring if they ordered more later as an investment in their future fleet.

I would imagine that will drive their answer.

gtx · by **gtx** » 04 Apr 2013, 19:15

maus92 wrote:Unnamed sources are saying that the cost of the full up F-15SE(isn) tender will be less than F-35.

Well, that's a useless comment - the "unnamed sources" could be your postman for all we know...

SpudmanWP · by **SpudmanWP** » 04 Apr 2013, 21:12

bigjku wrote:2. Do they consider some portion of the F-35 cost that would be non-recurring if they ordered more later as an investment in their future fleet.

Yes, it's right there in the DSCA announcement. They include simulators, a reprogramming center, train-the-trainer, etc.

bigjku · by **bigjku** » 04 Apr 2013, 21:23

SpudmanWP wrote:
bigjku wrote:2. Do they consider some portion of the F-35 cost that would be non-recurring if they ordered more later as an investment in their future fleet.

Yes, it's right there in the DSCA announcement. They include simulators, a reprogramming center, train-the-trainer, etc.

I am aware it was there. I was asking how Korea would account for that cost. If they believe they will buy more F-35's over time than they would logically spread that cost over the future airframes they expect to get.

maus92 · by **maus92** » 04 Apr 2013, 21:39

gtx wrote:
maus92 wrote:Unnamed sources are saying that the cost of the full up F-15SE(isn) tender will be less than F-35.

Well, that's a useless comment - the "unnamed sources" could be your postman for all we know...

Maybe useless to you, but interesting enough for others.

"One industry source familiar with the sale said the total sum was "conservative" and the final selling price of the F-35 and associated equipment would likely be significantly lower."

"One industry source said the total cost of the Boeing proposal was believed to be lower than that of Lockheed's."

http://www.reuters.com/article/2013/04/ ... nnel=11563

maus92 · by **maus92** » 04 Apr 2013, 21:53

bigjku wrote:
maus92 wrote:
bigjku wrote:One could make a pretty educated guess about the full cost of the F-15's given what we know about the K (which was 100 million a pop). It really depends on how much modification work is done to really make the Eagle stealthy.

You have to assume that much of that $40 million an aircraft in equipment replaces stuff that was part of the F-15K (radars ect) so that actually brings the price down. My guess is that it is added back by the SE modifications.

I think a reasonable price range depending on the extent of stealth modifications done is anywhere from $130-160 million a pop with the added risk that you likely can't be 100% sure about the final cost since Boeing has not built the thing yet.

Unnamed sources are saying that the cost of the full up F-15SE(isn) tender will be less than F-35.

I think someone calculated the F-35 one as being around $180 million per aircraft. The real question for the ROK is two fold.

1. Is the difference material for the value of each aircraft?
2. Do they consider some portion of the F-35 cost that would be non-recurring if they ordered more later as an investment in their future fleet.

I would imagine that will drive their answer.

The infrastructure that Korea already has in place for its F-15s probably helps Boeing's position to some extent. Operating costs for F-15s are pretty steep though, so even at $32K CPFH, F-35s might be cheaper in the long term.

*wildcard* Boeing has Korean subcontractor KAI that build parts for the F-15, and potentially the weapons pod/bays for the SE.

mor10 · by **mor10** » 04 Apr 2013, 22:34

Last time the Korean peninsula blew up the North were supported by China. If it had not been for China NK would likely not exist today, or at least in a different format than we see today. Should things get out of control again SK knows that they must be able to deal with a limited Chinese involvement, either with manpower or at least with more modern equipment in the form of modern SAM's. If/when that happens SK would be better off having F-35's rather than capable, but still yesteryears F-15's. We already see in the news that China is strengthening their forces just north of the "river", and we don't know if it is to deter NK, SK, USA or all three.

I almost wish China would lob a couple of shots across the river just to show KJU that they are not there protect his back, but rather to stop him doing something stupid that would threaten continued prosperous business with the western world.