I still support the F-35.
I still think it will kick ass.
But the supporters (Talking to you Lockheed Martin, the DoD and especially the Commandant of the Marine Corps) need to get down to brass tacks.
First this from AOL.
WASHINGTON: The official costs of the F-35 program have shrunk, not much, but they are down for the first time.A reduction of 4.5 billion dollars is nothing to sneeze at. But the problem is the accounting that is going on with this program. Why can't we get plain numbers from the DoD when it comes to the costs. A PER PLANE FREAKING COST ESTIMATE! Let me remind you that the EFV was considered too expensive when it busted the 13 million dollar per vehicle barrier....and we were going to buy a little over 1000 of those vehicles.
The Pentagon’s authoritative Selected Acquisition Report says the program is projected to be $4.5 billion less expensive than its last estimate. That’s 1 percent of the program.
F-35 December 2012 SAR
We are trying to get more information. Here’s what the plane’s maker, Lockheed Martin, issued this statement. Not surprisingly, they say they are “pleased” and promise to work with the government to lower them further. Here it is:
“Lockheed Martin is pleased with the $4.5 billion reduction in acquisition, operating and support costs reflected in the 2012 Selected Acquisition Report (SAR 12). This is the first year a cost reduction was noted. We will work with the F-35 Joint Program Office to implement further cost saving measures, which will result in additional significant decreases to the total program cost. The top priority of the government/contractor team is to continue to cost-effectively deliver the F-35s unprecedented 5th generation capabilities to the warfighter.”
If we're proceeding with programs that cost well over 100 million dollars per article (I'm talking F-35 and MV-22) then I'm going to have serious heartburn and must ask WTF!
Everytime we get program costs instead of individual costs my spider senses activate and I get the feeling that I'm being spun. Thats the last thing a controversial program needs.
When you have a plane that costs $100 million+ per plane how eager are you going to let the pilots "take it out for a spin" or do realistic training for forward basing scenarios?
ReplyDeletewell they're putting the MV-22 in the sand and i can't even begin to imagine what they're doing with the CV-22.
Deletei know i sound like a broken record but if total cost is the issue then a 20 million dollar EFV would be a bargain if its going to serve for 40 plus years! thats my point.
Sol,
ReplyDeleteThe first thing to remember is the official estimates are Government Customer estimates, NOT the contractor's: on the F-35 I like to call them the B.S. CAPE Estimates.
Estimating ambiguity only goes away at the same rate the program accrues more actual costs. As more actual costs are realized, the more cost relationships are better understood, the better the cost projection capability (vs. better estimates). The DEGREE to which that better cost projection capability is translated into a better estimate is tempered by the estimators fear of being wrong AND being blamed for it later. This always puts a bias in the estimates to always be on the high side. If the actual costs accrued over time consistently underrun the estimates, the estimators HAVE to bring their estimates down to keep from being found out. If the actuals overrun or are very near the estimates to date, the fear of underestimating will drive future estimates higher. If a program is beating the official estimates, the estimators only lower future estimates as more cost is in the past and it gets harder to justify their inflated numbers.
I'm digesting the SAR costs that came out Thursday as a low priority, and am frankly enjoying the anti-JSFer's tying themselves into knots explaining, warping or just making sh*t up so much, I may only write about this as survey of their contortions.
so we won't know the real cost of the airplane till we buy more airplanes?
DeleteYou can never know the exact costs until they are built. Even GM couldn't tell you the cost of the next Corvette they build, they only 'know' the costs of the last one. the Corvette is orders of magnitude simpler than a fighter, so the estimates are orders of magnitude easier to make. The purpose of estimates is to get an idea of what the costs will be so you can have some degree of confidence you are on the right or wrong path. Anyone who tells you that you can do anything BUT estimate until something is built is smoking crack.
DeleteI've been noting all along that the actuals are tracking much closer to LMs estimates, which most years have only been slightly higher than actuals, and their projected cost curve of the overall trend (direction and rate unit costs are decreasing) has been remarkably close. This latest SAR seems to continue the trend.
The biggest confounding factors to an outsider/joe sixpack picking "this is the number!" as 'True'?
Programmatic Factors:
1. Customer changing lot buy quantities. If I have a factory spooled up to build X aircraft because you told me last year I needed a to be able to build X aircraft this year and now you tell me you are only buying X-Y aircraft you just increased my indirect costs by a ratio of X divided by X-Y. It costs bucks to have a factory whether you are using it or not.
2. Customer changing product content and content delivery order. Norm Augustine's Laws "All changes cost" applies. If the Customer wants capability moved up or delayed in the Delivery LRIP or Blocks it causes change ripples throughout a program and drives cost up.
Non-Programmatic Factor:
Outside actors picking the costs they like as 'meaningful'. By itself, this is not too problematic, but invariably they are then used to compare with other programs, usually in the past, that do not involve the same cost numbers. The glaring exception to this statement is the Innumerati who insist on piling an amortized share of all development costs on top of actual unit production costs. Bill Sweetman was the first, most vocal offender that I noted in this regard, though I suspect he picked it up from the Military 'Reform' crowd. I suspect also he might take some pleasure in the fact that politics have now institutionalized the accounting method in the SARs after some Congressional 'Harrumphing' over same occurred.
Why is it wrong to assign a percentage of the development costs on each unit total cost? Because the objective of the development program is to bring the knowledge and engineering technology into existence that not only allow the aircraft to be built, but benefits any future project, military or civilian, that can then adapt or build upon that knowledge. charging the development costs against the unit total costs is ONLY logically valid if the knowledge gained is used only on the program that produced it. I have an excellent example of the inappropriateness of this accounting method. On the B-2 program, while I was still in the Air Force, new imaging technology was developed to perform composite material Non Destructive Inspection (NDI). That technology was being incorporated into medical imaging devices before the first B-2 flew. If you are going to quantify the costs, you have to quantify the benefits. I assert the benefits accrue and expand, and multiply long after the last 'journalist' has moved on to his next outrage or the last government beancounter puts down his pencil. A more abstract but equally valid example would be the space program. Virtually everything in our lives today benefitted and continues to benefit from the science the space program brought forth. Knowledge is 'viral'.
'Beancounting' needs to be put into perspective: "...not everything that can be counted counts, and not everything that counts can be counted". The quote is usually, and incorrectly, attributed to Einstein, but true no matter who said it.
Sh*t man, you got me on my soapbox . there's enough her I may cross-post it at my place. [;-)
ReplyDeleteIf you read the article on vhere and hov gains were made you can see cost didn't go down it was just reduced on paper trough creative accounting .
ReplyDeleteLOL. Reading through the fat fingered typos, of which I am guilty of all too often as well, I will point out that ALL cost estimation is "creative accounting" to a varying degree, with the creativity reducing over time, as more program reality comes into existence and less has to be guessed. It is ALL based upon sets of Ground Rules and Assumptions (GR&As), and can never be sophisticated enough to reflect the real chaos of 100% reality, but as more reality comes into the estimates, the closer the estimators can get to realistic estimates. Cost estimation is a tool. not an 'answer', but it IS entertaining to watch Cost Estimators defend their 'Precious' as if it were reality. In my analyses, I am always on guard against Cost people getting their fingers into my GR&As while they're under development, and when I throw it over the wall to them to crunch dollars, I will disavow any outputs they come up with if they make any changes or apply what I gave them in any way other than it was intended.
DeleteOne reason I love Military Operations Research and eschew Business O.R. is that I don't have to use GR&As or model constructs that were pulled out of thin air, or more likely a V.P. or PEO's nether regions.
While I'd argue the F-35 is a game changing strike fighter, and that all the numbers are just estimates, there are two trends that are worth following to get some indications of cost. The first is simply the official budget docs. Frex in the FY13 USAF budget the estimates for FY14 and FY15 costs for the F-35A were about $148 and $122 million. This year in the FY14 budget the costs rose to $152 and $131 million. Another factor here is the average projected cost for 1,763 USAF F-35A's is $114 million. That number assumes no force structure cuts and no strike wings flying a fighter sized UAS instead of the F-35. It's at best a problematic assumption.
ReplyDeleteThe other factor is the cost per flight hour. NAVAIR leaked some projected costs a few years ago that many dismissed. The estimate basically stated the F-35B/C would cost about twice as much per flight hour than the F/A-18 and AV-8B. At present the USAF has come around to accept NAVAIR's estimates as being within the ballpark. This is another factor that will put pressure on force structure and perhaps lower the total projected buy which will marginally raise procurement costs.
There may very well be metrics that one can point to that indicate costs coming down but based on comparisons of the P-40 year to year the trend doesn't indicate costs coming down. Indeed the numbers keep increasing. This isn't to say the sky is falling and if the F-35A ends up with an average unit cost of $120 million or less I'd personally argue given the capability of the aircraft the cost isn't out of line. However, replacing far cheaper F-16 and A-10 aircraft one for one in a world where fighter sized UAS are just starting to get into service is in my view unrealistic. That is the elephant in the room.
Ideally the estimate would include:
ReplyDeletedevelopment costs to produce only one fighter plane
expected production/marginal cost curves
the cost of the entire program after the entire production run
estimates for what if all our allies decide to buy Swedish, French, or Russian instead of F-35.
In Combat Aircraft monthly june 2013 on page 29 it is stated that Korea might get 60 JSF for a total of 10,8 billion $...or 60 F-15Se for 2,408 billion$...make the math as you want but it looks like the JSF is 4x more expensive than the F-15Se...
ReplyDeleteThat is a blatant misprint....
ReplyDeleteOnly in somebody's wet dream is a F-15SE only $40 million.
Without seeing the article, here is what I think is the mistake either they made or you made.
Only the FMS notifications have been officially released. As such, the whole of the F-35 bid is covered under FMS while only a small portion of the F-15SE bid is covered. That small portion of the F-15SE bid that is covered under the FMS process was a total of $2.4 billion.
http://www.dsca.osd.mil/PressReleases/36-b/2013/Korea_13-11.pdf
In the notification itself it explained this and stated that the F-15 airframe , engines, and a majority of the other parts are classified as DCS (Direct Commercial Sales) and the cost associated with that part has not been announced.
----Quote-----------------
The Republic of Korea has requested a possible hybrid case in support of (60) F-15 Silent Eagle aircraft being procured via Direct Commercial Sales (DCS). The proposed sale will include 60 Active Electronically Scanned Array Radar (AESA) radar sets, 60 Digital Electronic Warfare Systems (DEWS), 60 AN/AAQ-33 Sniper Targeting Systems, 60 AN/AAS-42 Infrared Search and Track (IRST) Systems, 132 Ultra High Frequency/Very High Frequency (UHF/VHF) secure radio with HAVE QUICK II, 69 Link-16 Terminals and spares, the Advanced Display Core Processor II, Joint Mission Planning System, various support equipment items, GEM-V GPS airborne receiver module, and communication security; software development/integration, spares and repair parts, personnel training and training equipment, publications and technical documents, U.S. Government and contract engineering and logistical personnel services, and other related elements of logistics and program support. The estimated cost is $2.408 billion.