F-35 cost may double

[Guest thegrayman]

Here's the link:

http://www.msnbc.msn.com/id/35678731/ns/politics/

It seems the reliable numbers are hard to find, but it seems unlikely that we'll get as many F-35s as we need to replace the F-16, F-18 AND A-10 if the cost is really that high. I wonder how the "partner nations" are taking the news. I wish defense contractors and the government could build more realistic cost growth estimates into the acquisitions process so that we don't keep paying 2x as much for a system as we originally were told. It makes the whole bidding system just seem dishonest when you know contractors like Lockheed have been building weapons systems for hundreds of projects and know deep down a project like the F-35's cost will most likely balloon during testing, but they have to get their "hooks" into us deep enough into the project to where we've spent too much money to back out. Do contractors really that project "X" will be the one that will actually be under-cost and ahead of schedule, or is it just a PR game between the brass and the company to make military spending more palatable to the American taxpayer?

[tripilot]

Here's the link:

http://www.msnbc.msn.com/id/35678731/ns/politics/

It seems the reliable numbers are hard to find, but it seems unlikely that we'll get as many F-35s as we need to replace the F-16, F-18 AND A-10 if the cost is really that high. I wonder how the "partner nations" are taking the news. I wish defense contractors and the government could build more realistic cost growth estimates into the acquisitions process so that we don't keep paying 2x as much for a system as we originally were told. It makes the whole bidding system just seem dishonest when you know contractors like Lockheed have been building weapons systems for hundreds of projects and know deep down a project like the F-35's cost will most likely balloon during testing, but they have to get their "hooks" into us deep enough into the project to where we've spent too much money to back out. Do contractors really that project "X" will be the one that will actually be under-cost and ahead of schedule, or is it just a PR game between the brass and the company to make military spending more palatable to the American taxpayer?

The problem with government contracts is systemic and self-reinforcing. During the bid phase, the contractor has a vested interest in bidding as low as possible. And so they justify, to the government as well as to themselves, the low bid. Everyone knows the bid will balloon; but there's no other useful metric by which to gauge the bid other than estimated cost, which must be pushed as low as possible.

When it times come to deliver the product, especially when you've got flight-capable units already prototyped, everyone knows that the project can't be canceled. So the issue is no longer money, the issue is technical competence. This is the point at which costs get out of hand. Because there is no longer loyalty to the bid. There is loyalty to building the best product (which is how it should have been in the first place).

The problem with the F-35 program (and every other contract in aerospace that the government has put out in the last 50 years) is this disparity between the bid phase and the production phase. The motivations are entirely different. The cost estimations aren't meaningful in the first place, and by the time that becomes apparent, it's too late to bail. I have yet to hear a good solution to this.

ETS. Holy hell, that SNAP under my avatar finally went away. Let my shit-talking commence.

Edited March 21, 2010 by tripilot

[Guest thegrayman]

When it times come to deliver the product, especially when you've got flight-capable units already prototyped, everyone knows that the project can't be canceled. So the issue is no longer money, the issue is technical competence. This is the point at which costs get out of hand. Because there is no longer loyalty to the bid. There is loyalty to building the best product (which is how it should have been in the first place).

Agreed...unfortunately now building the best airplane means you can't buy as many as you planned. The number of F-35s the military wants to buy has already dropped from 2,800ish to 2,400ish. I expect those numbers drop at least once more before (much like the F-22) before the production line is closed (or even opened, for that matter).

The real question is did the DOD inflate the number of F-35s they "need" because they have been to this dance before and realize that the production numbers were probably going to get cut during the process, or is our air superiority really going to be diminished AGAIN by the bungling of the acquisitions process?

[drumkitwes]

FWIW this is the government estimate. LM still says they expect the cost per fighter to be far lower so hopefully they do themselves a favor for future acquisitions and keep the cost down.

[Guest Texican]

Cost overruns are not always only the fault of the contractor. It is amazing how many times the government will require additional capabilities mid-way through development. You'll let them know that it wasn't in the original specs and it'll increase costs by some ridiculous amount, but they want it anyway. That is why in-house developed projects are successful and cheap.

[Bullet]

Texican, requirements creep is not the case here. Actually the opposite happened, about 5 years ago, when the F-35's capabilities at IOC were reduced and the aircraft had to go through a MAJOR re-design because it was too heavy for STOVL.

In fact, having to design and produce three variants is the primary contributor to why design and production are behind and over-cost. Guess we didn't learn from the F-111 program; making something that fits everyone's needs (and those needs are HUGELY different) means you end of with something that is behind, over-priced, and is so full of compromise that it hurts capability.

Edited March 21, 2010 by Bullet

[TarHeelPilot]

In fact, having to design and produce three variants is the primary contributor to why design and production are behind and over-cost. Guess we didn't learn from the F-111 program; making something that fits everyone's needs (and those needs are HUGELY different) means you end of with something that is behind, over-priced, and is so full of compromise that it hurts capability.

Jack of all trades; master of none

[Guest Hueypilot812]

The "price is doubled" claim is based on the original goal of having each fighter cost $50 million each. Since then, the costs of aerospace products has risen across the board. You can't hardly acquire any fighter worth employing in an air force for $50 million. Even the Saab Gripen rolls in at $60-70 mil apiece. South Korea paid nearly $100 mil apiece for their new F-15s, and the EADS Eurofighter runs a little over $90 mil apiece as well. The French Rafale? $85-90 mil apiece. So it's not unreasonable that a stealthy 5th generation aircraft that can supposedly be employed in numerous roles and missions wouldn't have increased in overall cost too.

I will add that our acquisition process is broken, and often leads to huge inflated budgets and other political problems. But the basic premise that the F-35 has "doubled" from an early pre-bid cost of $50 mil to around $100 mil should be placed into context. Want more context? A Boeing 737, which is tried-and-true technology for the most part and has already recouped its development costs handily, costs around $80 mil.

Edited March 22, 2010 by Hueypilot812

[Guest Raptor08]

I heard some figures that the fly-away costs for the first hundred or so F-35s will cost just a hair less than an F-22....

[brabus]

You think LM would learn, considering the price was a major factor in killing the F-22 numbers. Better to sell more at a lower price than far fewer at a high price (obviously past a certain point).

[Guest]

Lockheed's earnings in 2005 alone topped $25 billion dollars.

I don't think so, not even close.

But I agree they're doing just fine.

Ike was right and no one listened. LM is the Devil.

[Magnum]

Just buy twice as many jets. That should solve the problem, right?

[Guest Alarm Red]

Lockheed's earnings in 2005 alone topped $25 billion dollars. That figure exceeds the gross national product of 103 other countries combined. The F-35 program is estimated to cost roughly $300 billion.

....I think Lockheed's doing alright.

Or it was $1.825 billion¹. Which exceeds the GNP of 20 countries². But you were pretty close.

[Hacker]

Time to get that MBA, Hoss!