AvWeek’s Bill Sweetman, who has been tracking the Joint Strike Fighter program for a long time, says people are missing the elephant that was in the room at the Senate Armed Services Committee hearing on JSF yesterday, and that elephant is about to take a dump all over Defense Secretary Robert Gates’ office carpet. It’s called the acquisition “death spiral”: as a program’s costs go up the unit numbers purchased drop, hence per unit costs climb even more, fewer bought, etc. etc.
We’ve raised this issue here before. If the price of a unit of goods doubles, economic theory, and Pentagon acquisition history, teaches us that the quantity bought drops. Yesterday, Pentagon cost assessment and program evaluation director Christine Fox told the SASC that each JSF will now cost at least $80-$95 million, compared to an estimated $50 million back in 2002.
Sweetman thinks that’s still a low ball figure. GAO puts the current per aircraft price tag at $112 million. The reason that elephant’s going to do his business, Sweetman says, is that everybody is dividing the total production costs of the JSF by the planned Pentagon buy of 2,443 aircraft and foreign buys of around 700 aircraft. Those numbers are no longer realistic. Yet, as he notes, nobody at the hearing was willing to delve into aircraft production rates or total buys.
The winner in all of this has got to be Boeing, Sweetman says, who will be pushing the virtues of an $80 million F/A-18E/F Super Hornet. He also thinks some expected JSF customers, such as the Israelis, will take a new look at the F-15E.
For one, Marine Corps commandant Gen. James Conway must be spitting mad about right now. His service has held off buying new attack jets for a long time expecting the vertical take-off and landing F-35B would soon be on line. I’ll be curious to see how long he holds out before buying more Hornets.
– Greg
{ 28 comments… read them below or add one }
I wonder what Defense Secretary Robert Gates, is going to do when the other partners start to dropping their order numbers, to something is more in line with their current budget. It would really suck, if they move to a proven top of the line 4th generation fighter, like the Eurofighter Typhoon, Dassault Rafale, or Saab JAS-39 Gripen. Costs would really climb then and the lost to Non US companies would really look bad to Stock Investors.
This is so stupid now. We killed the F-22 which had a flyaway price of around 140 million to instead go with a plane that is now going to cost 115 million and possibly higher? We need to lobby congress to bring back the F-22. It was already in production and was the better air superiority fighter plus crews are already trained to handle it.
The fly away cost of the F-22 was 127 million just prior to shut down.
Scrap it all and make Lockheed pay us back they did this to themselves and the american people need not pay for their mistake.
Yes the F35 program has taken longer than expected, but what major acquisition program hasn't? Those that call for the program to be dropped in favor of the F22 (or what else? re-engine the harrier ha!) must not understand the mission requirements that this aircraft is designed for. Lockheed is now flight testing the aircraft, successfully i might add, using a completely new concept for vertical propulsion. People just don’t realize how hard it is to plan, estimate, design, develop and produce a program of this magnitude, while constantly pushing technology to the limit. I say bravo to the patriots at Lockheed that work hard every day to make your butt safer. The F35 is an awesome machine, we should be proud of it.
I wonder if they could reengine the Harrier?
I hope they kept the tools to manufacture the F-22.
Are we going to have to repay any of our allies for there investments if the program goes belly up?
Aside from the price jump of the F35 take into consideration the fact that it will be 6yrs. before full production.How many F22s would we have in 6 years while waiting for the F35?
The F-22 is not going to be flying off an aircraft carrier, lifting off vertically from a ship or a forward operating base. So it is not the solution.
The marines are screwed. Redesigning the Harrier may be their best bet at this point. But it is a lot of money for a temporary fix, plus the aircraft is very old….. The Super Hornet is not the answer either.
In many respects I think we are stuck. We will have to buy the 2,400 aircraft to keep cost from getting higher. We may have to spread the buying out over a longer period though……
Or we could take the design and shop around and see if someone else can make it cheaper. Since the military paid for the aircraft to be developed, it can take the specs and put it into cost competition.
This is a radical step, but it would slap the aerospace industry back into reality.
Of course since they will not even bring up the death spiral in the debate it is probably a long shot….. The political campaign contributions must be flowing. Isn't it funny, our tax money given away is being used to influence our politicians….
This is what happens when you put all your eggs in one basket. Lockheed's really got ol' uncle sam by the balls now doesn't it?
I feel United States military budget is about 20 to 40 trillion out for the last decade.
Its all in rich people underground suvival cityes at this point.
This has been going on after the idea surfaced about 2 decades ago.
The figure is stil however missing what is going to military without any acknowledgement.. :) :)
People seem to forget that when something is promised in 2002 year dollars, that they need to correct for inflation. Using the consumer price index of 1.21 to adjust the price, that $50M plane SHOULD cost $60.5M in 2010 dollars. Since the CPI is a bad yardstick for things like airplanes, the Producer Price Index (PPI) is a better yardstick. Going from 2002-2009, the PPI for aircraft is 1.29 and the PPI for commercial aircraft is 1.37 (look it up yourself at BLS), so depending on which yardstick you use that $50M plane SHOULD cost either $64.5M or $68.7M if everything was proceeding exactly to plan. That assumes LockMart is executing perfectly, DOD isn't changing requirements frequently on a whim, and Congress is allocating all of the budget according to plan. Considering the fact that at least one of the above caveats is likely wrong (probably all three), $80M vs. $68.7M doesn't look like too bad of a deal. On the other hand, if $80M (or $95M, or $112M) per plane is the current price in 2002-year dollars, they're in pretty deep yogurt…
How come no posts on the tanker bid drop out of Northtrup Grumman?
The fact that the U.S. refuses to make the source code available to even its closest allies such as Britain, Australia, Canada among others makes the airplane an unattractive buy. I don't think any of these nations like the idea that F-35 upgrades and in-depth maintenance can only be done in Texas. It's simply impractical. The excessive price and numerous delays just makes the whole project even less appealing. I wouldn't count on too many non-US customers.
The Marines are sticking to their 2012 IOC date, so I fail to see what the big issue is with the Marines and the F-35. They'll get their aircraft at the expense of some functionality that will have to be added in later.
Considering that the F-22 was declared IOC with numerous, serious problems remaining with the aircraft I would bet that Gates et al have made it clear that this will not be allowed to happen with the F-35. Hence pushing out the IOC date to allow for better flight testing. The Marines have a somewhat more urgent need for jets, and if they're willing to absorb potentially problematic initial production aircraft all the better.
I also note that costs thrown around recently for the F-35 are program costs – by that standard new F-22s would be $400 million aircraft. Actual flyaway costs appear to be half to three quarters what you'd be paying for an F-22 and the long-term maintenance costs on F-35s will be substantially lower.
All this for an aircraft that is overall much more capable than an F-22. Now, Lockheed needs to have a fire lit under its rear to deliver the goods and get the program back on track, but it's puzzling why people seem to think they're incapable of doing so for a program currently in flight testing. One Nunn-McCurdy breach and a three year delay is sadly pretty routine for combat aircraft.
Good Evening Folks,
Not only are the Marines screwed, they to add to the injury lost another A/V-8 this week. So is the Navy. With the Navy in fact is a double screwing. First the money spent on the F-35 will take from its ship budget, yes the Defense Budget has become a zero based activity, with a reduction in number of airframes the question must be raised of how many carriers can the Navy support. Currently carrier air groups have shrunk to 65-70 aircraft on a deployment. The CVN’s can accommodate over 90 aircraft. Will less aircraft mean fewer or smaller carriers?
ALLONS,
Byron Skinner
Why not INCREASE the buy by a factor of 10 and demand an 80% reduction in price?
That is what semiconductor buyers do.
This is going exactly as planned. The contractor makes a couple of hundred billion on a 25 year long R&D project and actually produces nothing for it. The military brass gets to run around for a generation pretending its accomplishing something, then retires. And Congress gets to piss away as much money as humanly possible. It's the perfect trifecta of military procurement.
The rules should be that if your military contract goes over budeget, the contractpr pays the difference or is forbidden from ever bidding on government work ever again. Ya know, just like a reasonable human being would treat any contractor working on his house.
> This is going exactly as planned. The contractor makes a couple
> of hundred billion on a 25 year long R&D project and actually produces
> nothing for it.
> …
Dead on. Just don't use the word "welfare" to describe this process, though, as you'll be buried in outraged replies that distinguish between food-and-rent payments that go to undeserving, shiftless, lazy poor people (read "the other"), and good virtuous payments that go to selfless, deeply deserving military contractors (read "defenders of the Homeland").
> The rules should be that if your military contract goes over budeget,
> the contractpr pays the difference or is forbidden from ever bidding on
> government work ever again. Ya know, just like a reasonable human
> being would treat any contractor working on his house.
Well, yeah, except that the people who draft, sign, and administer these contracts and programs eventually go to work for the vendors at much higher salaries, so there is a bit of an iron triangle problem there (see Tauzin, Billy, for a related example).
Cranky
And then consider this bullshit tanker bidding process. Why do they bother pretending they don't know the winner before even looking at the proposals?
Honestly, the Federal Reserve should just give the major defense contractors their own printing press and tell the companies to have their employees just stay at home and watch television. Then at least the taxpayer would get lighter rush hour traffic in exhange for the hundreds of billions that get pissed away producing NOTHING.
The same thing that happened to the F22 is happening to the F35.
We really need the F-35 at this point. Unless somebody can design two new fighters (a VTOL design for USMC), and get them in service before 2015, getting the F-35 back on track somehow seems the only realistic option.
> getting the F-35 back on track somehow seems the
> only realistic option.
But you are assuming that anyone involved wants to get the F-35 "back on track" for any plain-language meaning of that term. Getting it back on track would require shutting down the entire program management/project management/spiral management/oversight/auditor/etc. overhead, taking the few hundred engineers, production people, pilots, and technical managers who are actually getting the work done (note that I said "managers" not "project managers"), putting them in isolation with the resources they need to complete the work, and letting them finish. But doing so would reveal that 85% of the overhead, personnel, and spending on a modern "weapons system" project are totally unnecessary which would give the game away.
Cranky
Government procurement is a joke but not as big a joke as the MORONS tn the house and senate who claim support for the military all the while they cut the production of weapons systems while lining their pockets .
Part of the F-35's problem is that cheap was part of the original design concept. In contrast, the F-22 was sold in the first place as being expensive.
According to the guys over at Warthog news:
http://warthognews.blogspot.com/2010/03/deliverin…
Why the heck is it taking us 25+years to design fighters now? When did this become normal? Why are we assuming this madness is perfectly normal and fine?
The B-52 took less then ten years (1945-1954) to go from basic concept request to the first production B-52B models. It went from a 6 engine turboprop to an 8 engine jet. Included in all the adaptations was a six month hold to let the technology catch up so the AF wouldn't wind up with something inferior to the B-36!
All of this, with no CAD, no computer aided physics programs to reduce wind tunnel time, no ultrafast comm between offices, and constant government interference.
The AF released the RFP that wound up becoming the F-15 in 1964, and got their first batch of F-15As in 1978. In spite of a congress that wanted the AF to buy F-14s, and a bunch of fighter mafia generals who were convinced that the F-15 couldn't dogfight. Four companies won bids; McDonald Douglas took the competition, and had the first test F-15A out in 1972.
What will it take to get the programs back in line? Should we go back to slide rules and ban all office computers? God forbid we try something Cutting edge, capable of matching the performance specs of such powerhouses as the B-58, the U-2, or the SR-71!
How about we produce 5 more B2s and have it fly around the country BOMBING the defense contractors–ha ha
There is one reason for the soaring costs and only one reason……..GREED!