F-35 cost

The F-35 Cost – Is Falling But Never Affordable

The F-35 cost is difficult to define. Forget the many zeros and consider the answers to these important questions:

  1. Is the cost of the F-35 out of control?
  2. Is the F-35 an affordable aircraft?

We will look at the facts associated with each question for you below.

What do the Yay and Nay Sayers Think?

Let’s look at a typical example of each sides position below.

Opponents of the F-35

President Trump is a good example for the negative. He has made his thoughts on the F-35 cost well-known during the Presidential election campaign and following his election. Opponents typically sit behind “the most expensive military program in history” slogan and use this as the basis for “costs are out of control”. It is hard to disagree. 

Supporters of the F-35F-35 cost

Those who favor the F-35 often refer to facts and figures to show that the F-35 cost is falling. Again it is hard to disagree.

Lt. Gen. Chris Bogdan, former head of the F-35 Program says “This program is not out of control”; “the period 2006-2011 saw a series of disasters adding up to a six-year delay and a $13.5 billion cost overrun”; “Since 2011 we have basically been on schedule and budget.” Breaking Defense

Both sides have good cases until we scratch the surface and find that the opponents focus on the history while supporters focus on the present & future. In other words, each side is using available information to advance its own cause.

We will not find the answer to our questions by listening to the squeaky wheels promoting their agenda. The answer will be found by looking at the key facts and making our own assessments.

Six Reasons why The F-35 Cost is Under Control

If something is out of control, people are not able to limit it or make it do what they want it to do – MacMillan Dictionary

By definition the F-35 cost is not out of control as demonstrated by the six points below.

The F-35A Unit cost is falling

In 2017 bloomberg.com reported the “F-35’s grotesque cost overruns are now past.”The change in procurement model from “cost plus” to “fixed price incentive fee production” contracts ensures this.  The F-35A unit cost has fallen for some time:

F-35 cost

 The F-35 Engine Cost is Falling

The F135 engine, manufactured by Pratt & Whitney, has experienced multiple issues including design and the a very public engine fire that is impacting cost. In spite of this the cost of the F135 engine has trended down since LRIP4. You can read more about the F135 engine at the link below.

F135

Read about the F135 Engine here

 

F-35 cost

Manufacturing Efficiencies are Reducing Cost

Aeroweb.com has reported that “Due to efficiency gains and process improvements, Lockheed Martin has been able to cut the number of labor hours required to produce an F-35, from 153,000 hours a copy in 2011, down to 50,000 hours by mid-2015. Fewer hours equals less cost.

Economies of Scale are Reducing Cost

Popular Mechanics provides the best definition – The more orders for a particular product—be it shampoo, cars, or Joint Strike Fighters—the less it costs to produce that item because the manufacturer can buy raw materials or parts in bulk and even negotiate cheaper labor costs, and pass that savings on to the consumer.

The number of F-35 aircraft ordered per contract has increased in the last four Contracts. The chart below indicates how the order quantities have been and will continue to increase for some time allowing production costs to fall on an ongoing basis.

F-35 cost

Special Projects are Reducing Cost

  • Lockheed Martin’s “F-35 Blueprint for Affordability” program received a 2-year extension following Frank Kendall, the Pentagon’s Head Buyer, declaring its success in reducing costs. The Blueprint is targeting savings of $4 Billion.
  • The “Sustainment Cost Reduction Initiative” (SCRI) commenced in 2016. This initiative will focus on reducing the operation and sustainment costs of the F-35 weapon system. It’s target is a $1 Billion saving over 5 years.

President Trump is Reducing Cost 

This is where President Trump will add some value. He has a hands on style that places enormous pressure on key Contractor’s to give ongoing and sustainable cost reductions. Trump claimed he obtained $600 million in savings out of the total $750 million savings achieved in the most recent F-35 contract.

 TrumpYou can read more about President Trump’s negotiation with Lockheed Martin here

 

Five Reasons why the F-35 Is Not Affordable

F-35 Program

In the 2000 JSF Operational Requirements Document (JORD), affordability was the cornerstone of the four pillars of success. The others being Lethality,Survivability and Maintainability.

F-35 Program Cost is 45% Over Budget

The US Government Accountability Office released a report on 30 March 2017 titled “Assessments of Selected Weapon Programs” reference number GAO-17-333SP . Page 165 contained a simple table that demonstrates the latest program costs. The figures speak for themselves.

F-35 PROGRAM PERFORMANCE (Fiscal Year 2017 Dollars in Millions)

F-35 cost Source: GAO-17-333SP Assessment of Selected Weapon Programs (pg. 165)

F-35 Airframe Unit Cost is over Budget

Doing the math from the above table we can see that in 2001 the affordable airframe cost is $65 million (in 2017 dollars) each while in 2016 the cost of a F-35A is an unaffordable $109 million each. The B and C versions cost even more.

The latest F-35A contract unit rate fell below $100m for the first time and experts expect the cost to continue to fall to as low as $80m per F-35A. Even with the cost of the F-35 under control and falling, the F-35 will never return to the promised cost.

F-35 Cost per Flight Hour is double the F-16 & F/A-18F

F-35 Cost

Source: US Air Force

The F/A-18F Super Hornet, operated by the US Navy and Royal Australian Air Force, adds even more misery to the equation as its cost per flight hour is $17,000. No wonder the US Navy wants a mix of Super Hornets and F-35’s.

 F-35 Cost of Concurrency

Concurrency in the context of the F-35 means that development testing and production of the F-35 is occurring at the same time.

Concurrency Cost relates to the cost of retrofitting aircraft already manufactured with fixes found during development testing.

The US Government Accountability Office report GAO-17-351 released in April 2017 reports that the US Department of Defence has procured 285 aircraft to date and has experienced a total of $1.77 billion in concurrency costs. The cost may increase by another $1.1 Billion if the extension to the testing period extends beyond 2017 as predicted.

Senior military officers have acknowledged the cost of concurrency:

  • In 2011, Commander of the Naval Air Systems Command, Vice Admiral David Venlet, confirmed that the concurrency built into the program “was a miscalculation“. Source AOL Defence
  • In 2012, General Norton A. Schwartz decried the “foolishness” of reliance on computer models to arrive at the final design of aircraft before flight testing has found the problems that require changes in design. Source Defence News
  • In 2013, JSF project team leader, USAF Lt. General Chris Bogdan, said that “A large amount of concurrency creates downstream issues where you have to go back and retrofit airplanes and change production lines, driving complexity and cost“. abc.net.au\Four Corners.

Not All Retrofits are Charged to the Taxpayer:

  • Pratt & Whitney (provider of the engine for the F-35) agreed to shoulder the bulk of the cost associated with the fix of its F135 engine after the very public engine fire in 2015. This included redesign, updating production lines and retrofitting all delivered aircraft with the fix.   flight global.

F-35 cost

The Cost of the F-35 Commonality Strategy

The 2000 Joint Strike Fighter JORD noted that a high commonality of parts across the three F-35 types (A,B & C) will lead to an affordable fighter plane. According to Popular Mechanics the Joint Strike Fighter program called for a common design with three variants to share 80% of their parts.

Today, in 2017, the reality is that about 20% of the F-35’s three variants have common parts. An aircraft cannot be affordable when its key strategy to lower costs is a complete failure. The US Senate Armed Services Committee summed it up best in their “National Defense Authorization Act for Fiscal Year 2017″

Despite aspirations for a joint aircraft, the F-35A, F-35B, and F-35C are essentially three distinct aircraft, with significantly different missions and capability requirements.

Rather than creating an affordable fighter plane, the commonality strategy ensured the F-35 is NOT AFFORDABLE. It was a terrible idea, executed poorly and we all will be paying for it for the next 40 years. If it lasts that long!

The Final Words

Should we start a movement to rename the aircraft F-36, F-37  and F-38. We can get rid of the “F-35” designation altogether. What do you think?

“F-35 cost is under control”

“The F-35 cost is falling”

“F-35 cost is not affordable”

Fletcher 

If you like this post please share it with your friends or groups. Spread the facts so we can stop the hysterics and focus on what is important.

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