Skip to comments.DOD: Decision To Dial Back F-35 Production Cost $6 Billion
Posted on 04/02/2012 3:44:51 AM PDT by maddog55
The Pentagon's recent decisions to dial back F-35 production over concerns about aircraft maturity added $6 billion to the program's total price, according to a new report that forecasts the cradle-to-grave cost of the Joint Strike Fighter to be $1.5 trillion -- a 15 percent increase over last year's $1.3 trillion forecast.
In a statutorily required report delivered to Congress today, the Office of the Secretary of Defense provided details of the F-35 program that the Pentagon's acting acquisition executive, Frank Kendall, formally restructured yesterday by approving a new program baseline that incorporates updated cost, schedule and performance estimates for the stealth fighter.
The cost to develop and produce the fleet of 2,443 aircraft is now estimated to be $395.7 billion, according to the Selected Acquisition Report, a 4.3 percent increase over last year's estimate of $379 billion. The life-cycle sustainment costs are projected to be $1.113 trillion, according to the SAR, bringing the total life-cycle cost of the F-35 fleet to more than $1.5 trillion. Last year's report estimated the sustain costs to be $1 trillion.
For a second consecutive year, the Office of the Secretary of Defense exempted the Navy, Air Force and Marine Corps from declaring new Initial Operational Capability dates for their respective F-35 variants, according to the SAR.
The military services have requested, with the support of the Department, to delay establishing Initial Operational Capability (IOC) dates. The U.S. Services require more definition in the program schedule regarding IOC requirements, to include operational test dates, before targeting a timeline, the report states, noting IOC dates should be identified in 2013. The Marine Corps had previously hoped to have its first unit operational this December; the Navy and Air Force in April 2016.
In accordance with a fiscal year 2011 law, the Pentagon accounts for the F-35 program by segregating aircraft costs from the engine, a breakout not disclosed in previous Selected Acquisition Reports. The total cost to develop and procure the aircraft is estimated to be $331.8 billion; the cost to develop and buy the F135 engine is $63.8 billion.
The F-35 average unit cost, including development, is forecast to be $135 million, a price that includes future inflation assumptions. In current FY-12 dollars, that same price is $112.5 million, according to the report.
During the last year the total estimated development and acquisition cost of the F-35 program increased by $16.2 billion, or 4.3 percent.
Nearly 40 percent of that increase, $6 billion, stems from the Pentagon's decision to slow down early production of the F-35 over concerns about the aircraft's maturity. A revised forecast that assumes slower procurement of the F-35C by Italy added $480 million to the program's total cost.
The aircraft portion of the program accounted for $10.6 billion of the cost growth. Of that, $673.1 million was attributed to research, development, test and evaluation costs, including revised estimates of risk funding. The procurement costs were revised upward by $5.7 billion, according to the SAR, including a $5.5 billion increase for revised DOD procurement profile.
The engine portion of the program increased by $5.6 billion over the last year, including $985 billion to account for revised lower near-term ramp rate and procurement completion extended two years.
The new F-35 plan extends production of the Navy variant until 2027, a two-year stretch; and the Air Force variant until 2037, a similar prolongation. -- Jason Sherman
To paraphrase Dick Jones,I have a guaranteed military sale with the F-35. Renovation programs, spare parts for 25 years. Who cares if it works or not?
So perhaps Norm Augustine was right after all.
“In the year 2054, the entire defense budget will purchase just one aircraft. This aircraft will have to be shared by the Air Force and Navy 3-1/2 days each per week except for leap year, when it will be made available to the Marines for the extra day.”
wow. Hey, if they bought fewer planes the price would probably go up billions too.
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