The F-35 and the USAF fy2010 budget
Now that the U.S. DoD Fiscal Year 2010 budget is approved, lets look at how much the United States AIr Force (USAF) pays for the F-35 Joint Strike Fighter (JSF).
The F-35 is still in Low Rate Initial Production (LRIP) so costs of the aircraft will be high. Because of the severe lack of flight testing and delays in getting AF-1, the first production representative conventional take-off and landing (CTOL) in to the air—it rolled out in December of 2008, we don’t know if costs of the aircraft will go down in the traditional sense. There is not enough test flight verification to confirm what is being produced.
Of more interest is that the USAF has not put any long range planning into the F-35 line-items for this years budget. This is most likely quadriennial defense review (QDR) realted. See this chart of the F-35 in the fy2009 USAF budget which shows estimated costs out to the end of the program. (click charts for easier reading)
Below are the F-35 specifics to the USAF fy2010 budget, not counting long lead items for follow-on production. The USAF is the biggest buyer of the F-35 and this is where one should start as any reference on F-35 aircraft price. Again, it is early in the program. This also shows why partner nations didn’t jump on to Operation: Lighting Strike; the effort launched in 2007 to give JSF partner nations a fixed price on early F-35 buys.
While the F-35 is meant to be export-friendly, the goal of the program is to provide an affordable aircraft. Given the progress in the program, it will be a very long time before we know any claims of affordability are true. Something to think about when the sellers of the aircraft say it is “affordable” and state some low price with 5 different conditions added to it. For the CTOL, always look back to the USAF for the baseline cost and adjust from that point. That advice comes with some caution.
Consider the accuracy of the USAF to price predict. Look again at the first chart above for the USAF F-35 fy2009 budget. Look at what USAF predicted that the “Flyaway Unit Cost” and “Wpn Sys Unit Cost” would be for fy2010 and compare it to what the USAF will pay in the fy2010 budget charts. Notice also that the USAF was supposed to get 12 aircraft for fy2010 and only got 10. There will probably be adjustments like this as we go along.
Hey, but good news. Discussions for the fy2011 budget aren’t that far away.
.
Vince, 
geogen, 
infocyde is discussing. 
RSF is discussing. 
Bellistner, 
Jason Simonds, 
One can hope. The F-111 had a troubled development and it turned out to be a great buy. In any case, the decision’s been made, and we all have to live with it. I’d be a lot more comfortable if the Coalition (read: Howard) had actually followed some sort of procedure rather than falling for some slick talk and fancy PowerPoint slides. If the F-35 turns out to be a great buy I’ll be more than happy, but the ADF/Government has made a lot of bad decisions in recent years, and it doesn’t fill me with confidence. 
torrent, 
Andrew McLaughlin are discussing. 
Weaponhead are discussing. 
Vince 7:21 am on November 1, 2009 Permalink |
With these prices no country can afford to buy large numbers of them.
Shame really that a suposed to be cheap fighter program gotten so out of hand.
Moment has come this program eats too much out of the overall budget and choices wil be made. Either it be cancelation of orders, lower numbers or complete termination of the whole program remains to be seen. But the signs are on the wall.
I expect the QDR review to deliver the F-35 program a big blow in the USA.
As for my country Holland it is reconsidering and they are right.
/Me summons SpudmanWP who gonne explain somehow that customers not paying that much for the F-35.
Happy sunday all
Vince
geogen 9:20 am on November 1, 2009 Permalink |
Good compilation of sources for brief references, thanks.
What clearly jumps out upon review, is the 2008 estimate for FY10 Unit Flyaway Cost of $158m. Then enter 2009 estimate for FY10 budget’s Unit Flyaway Cost; $188m. $30m recalculation per unit to the plus side, over one year’s time.
Another interesting table which must be noted is the total ‘Unit Procurement Cost’ (including initial spares and adv. proc) for FY10 being MORE, and not less, than FY09’s Total Unit Procurement Cost. (The initial spares and support costs – probably due in part to FY10’s block II jet’s cost exceeding FY09’s block 1 cost – contributed to the overall hike per unit, for FY10). This isn’t to imply that Unit Procurement Costs for FY11 or any other proceeding yr will be more than the preceding per unit total UPC price, but it’s worth noting nonetheless.
—————————–
To SM-
In response to your fair comment and clarficiation I will concede to a degree given my misuse of the term ‘URF’ according to how I/you were defining it. I concede I should have used the term UFC or basic Unit flyaway Cost when predicting a ‘Then Year’ avg cost of $150m for the first 250 F-35A. But I was also mistakingly adding, in my mind at the time, the $30m per unit portion from the FY09’s advanced procurement funding to FY10’s URF/UFC budget.
Such ‘adv proc’ portion of funding should only be added to calculate a fighter’s full Weapon System Cost apparently..
To reaffirm however, it is a hihgly reasonable assessment to doubt Congressional funding as is, for 24+ block 3 USAF jets in FY11 (priced at the full UPC cost) or to buy 42+ (accelerated) F-35A in FY12. E.g., 40 USAF units’s total Procurement Cost for FY12 buys, could cost almost $8b alone! Does US Congress understand they will be doing this yet? Or should we wait for Oct. 2011 and find out then that Congress is shocked at the bill and saying sorry..
RSF 4:28 pm on November 1, 2009 Permalink |
Good reporting as usual from ELP! A few comments from me as follows:
1. Review the jump in costs associated with engine PGSE in the second table. This for the P&W F135 which is supposed to be saving the program money.
2. The jump in costs for airframe PGSE for 2010, which discreetly acknowledges the continuing/developing changes needed to support the airframes in testing for the coming year.
3. The production engineering support costs for the 2010 year are projected to almost triple from year 2008. Enough said!
Then there is the “Description” at the bottom of table one, much of which should be considered fictional at this point. Some of my favorite parts are:
1. The F-35 is the next generation of strike fighter which will increase aero performance, stealth signature and counter measures.
A: The F-35 has a performance envelope inferior to the existing air superiority/air supremacy fighters in air to air combat (F-15/F-22). It’s stealth capabilities are second rate compared to the F-22 and B-2 which are already in service. The statement on countermeasures is pure hype until the NGJ is available for the JSF.
2. The F-35 has increased range with internal fuel.
A: This selective statement ignores that the F-35 will have to carry drop tanks to have enough range to execute many of its missions, and which will further degrade its already dubious amount of stealth. This also omits the current range of existing strike fighters currently in service with conformal tanks.
3. The highly supportable, affordable, state of the art aircraft command and maintains global air superiority.
A: Using past trends and cost increases as a benchmark, we will be looking at prices per airframe at close to 200 million per copy by the end of 2010. Can that be considered affordable? Looking at the performance envelope of this plane vs. existing air superiority/air supremacy fighters (F-15, F-22, Typhoon, Rafale, SU-30, SU-35, etc), the statement that the F-35 maintains global air superiority is clearly false.
This program is now on course to be the most expensive to develop fighter in US history. The aggressive 2010 test flight schedule should be interesting to watch considering the difficulties LM has had meeting the 2009 testing requirements. How long can the cost increases go on before the US Congress/Administration start asking serious questions about the viability of the JSF program? All in all, 2010 should be an interesting year.
SpudmanWP 1:11 am on November 2, 2009 Permalink |
“/Me summons SpudmanWP who gonne explain somehow that customers not paying that much for the F-35.”
Hold on…. The download from the future is almost done…. Ok, the new info is that they will be free
In all truth, the US is the only customer that will be paying these kinds of numbers. The first significant foreign orders don’t start until 2012/2013.
The reason I, the US Gov, and LM use the URF cost when speaking about the cost of a fighter is that adding all the non-recurring costs distorts the manufacturing efficiencies that have been achieved. Here are some examples to show this:
1. Page 41 in the PDF states “Nonrecurring Costs includes funding for Diminishing Manufacturing Sources (DMS) necessary to protect JSF delivery schedule.” So basically they are paying companies to stay I the program until orders get big enough to pay for themselves. When the orders get large enough, this payment goes away.
2. PGSE stands for Peculiar Ground Support Equipment and has nothing to do with the cost of the plane. The increased cost could easily be due to the fact that these jets are going to Eglin and they will need the extra equipment due to being a training unit.
Non-Recurring costs are exactly that and have nothing to do with the cost of the fighter. They could be anything and to include them in determining the cost of the airframe is disingenuous.
RSF 4:13 am on November 2, 2009 Permalink |
SWP:
The fact that the US is the only customer that’s paying that price makes the funding increases for this plane no less insulting, and perhaps more so considering the state of the economy.
I know what PGSE stands for, and thanks that’s not the meaning I got from those two line items.
In reference to the non-recurring items, they are still part of the overall price of the project and that makes them part of the total funding allotted for the JSF, so I for one don’t agree with your statement that this should not be included in the total price for the F-35.
SpudmanWP 4:51 am on November 2, 2009 Permalink |
What funding increases are insulting? Since it is only a line on a form, and you have no idea what is onvolved, how can you come to that conclusion?
If you do not want to accept the definition of PGSE, then what do you think it means?
I did not say it should not be included in the total price, just the recurring price, which is what the benchmarks are set by.
The problem I have with some people is that they see the price of the program as a whole (as it is today) and think that is what foriegn clients are going to pay.
This is a bad assumption on several points.
1. We are in EARLY LRIP and the costs are enormous.
2. These costs will go away as the program gets larger, ie you only have to pay for a new runway once.
3. The JPO and LM have put out many price estimates for the F-35. Those price estimates are based on URF and to see how well they are meeting their goals, we have to look at the URF and only the URF.
RSF 5:47 am on November 2, 2009 Permalink |
SWP:
If you can’t understand whats troubling about a program that’s now billions of dollars over budget, in a time when the citizens of this country are losing their jobs, homes, etc, then perhaps there is nothing further to discuss here.
You have continued to speak in double talk and techno babble, picking at individual facts but refusing to acknowledge the truth even when its revealed in the stark numbers in the aforementioned tables.
Don’t patronize me about the “true meaning” of PGSE like its is your mission to humor and educated me because I don’t understand. I know the definition of the term, as usual we have derived different meanings of what this means in the budget for the F-35.
Until I see a real, fully functional, flying F-35, meeting test flight schedules, being on budget, and doing what its supposed to do, I will continue to speak out as needed.
geogen 8:31 am on November 2, 2009 Permalink |
“When the orders get large enough, this payment goes away.”
Not entirely. Firstly, we are assuming Congress will agree to continue funding the total Fighter procurement budget to the point “When orders get large enough”.
This is perhaps the largest flawed assumption going today. I.e., Congress is not yet looking 3-4 yrs down the road, let alone FY12 when even 40x block III USAF F-35A units could cost $8 billion in total Procurement Cost (not including USN buys). How will USAF afford that with a stabilized budget at best and reduced budget, likely?
So we will have either high total unit-order Procurement Costs, or higher non-recurring as well as common ancillary costs accompanying the spiral upgrade modernization (giving the Total Flyaway portion of the Procurement Cost).
“the US is the only customer that will be paying these kinds of numbers”
This will be an issue at some point with Congress. Non-recurring costs can be ‘passed onto’ US side of the Program costs, true and thus be hidden among actual US procured unit costs. Same applies to overall ‘US and FMS’ Support costs. E.g., other customers ’support costs’ such as ‘Pec Trng Eq’, ‘Prod Eng Supt’ and ‘Other ILS’ can potentially be added into US budget line items. This would potentially be an externalized, additional cost to US procurement costs, if it indeed occurs.
“Non-Recurring costs are exactly that and have nothing to do with the cost of the fighter”
… more like has nothing to do with the cost of the airframe/electronics/engines (URF)? Non-recurring costs are of course added to the cost of the fighter Procurement Cost and ‘weapon system’ cost – the latter cost being the total fighter cost recorded in the budget… and one being very relevant to Congress and DoD’s acquisition policy.
“we have to look at the URF and only the URF.”
Like planning one’s personal budget around one’s housing expense only. Again, ‘we’ will look at it (URF) only, until Congress eventually looks at the ‘weapon system cost’ line in FY12 or FY13 and says; “we’re sorry, we didn’t know…”
Vince 9:48 am on November 2, 2009 Permalink |
First of all i wanne say to SpudmanWP thx for posting your view. I dont agree wiht it but i like reading opposites views.
What i see when i look at al these numbers is a program that is running out of money and does some creative bookkeeping to keep it running.
The program is still in early testing stages and it will be years till it is ready for full production. Prices wont come down for at least 5 years.
In fact they are going up atm not down.
Add that to the slow progress the program makes atm. The planes are not mature not by a long shot.
I seriously doubt Holland gonne order even 52 F-35 cause theres an offer from Saab for 84 mil per Grippen NG. Compare that to the fly away cost from the F-35. Add 84 mil for sustainment for 30 years. And i know what Holland wil do.
SpudmanWP what do yu think a F35 Fly away cost wil cost like in 2012 . And what wil be the sustainment cost for 30 years. 2012 being the year Holland wanne make a replacement order for its F16’s.
You think it wil drop from 211 mil (2009) to below 100 mil?
Vince
SpudmanWP 7:16 pm on November 2, 2009 Permalink |
RSF —
The program, as a whole is not “billions over budget”. What the JET said was that there was a “risk” of it being up to 15 billion over budget. This is not a certainty and even the DoD admits that the JET is meant to be a worst case scenario. And even in the JET case, the cost increases are on the development side, not the procurement side of the budget.
As far as the program being behind, yes, they are approximately 3-4 months behind schedule for testing. They are not behind on the production side.
I am sorry that you are unwilling to accept that PGSE means exactly that, but you cannot just make up meanings to terms in a budget.
Speaking out is ok, just don’t make stuff up.
Geogen –
I never said not to look at the weapon system costs, just that in order to gauge the manufacturing deficiencies, you have to look only at the URF. Since all the other, non-recurring items are not itemized, these cannot be used as a gauge. A good example of this is the PGSE line item in the budget. At first glance it looks like they cost is skyrocketing. But logically this is due to Eglin being a training base and needing more equipment than a normal unit.
Again, the benchmarks set down by the JPO about how much a F-35 will cost over it’s lifetime are stated in URF and that is what I was using.
Vince –
I am not sure what you are looking at, but every aspect of the F-35’s production has been getting cheaper every year. The difference between the 2009 and 2010 F-35A was a drop of 19%.
If you mean that it might take 5 years to get below a certain level, then please state the level and price criteria (ie URF, Flyaway, Weapon System, etc).
And yes, the planes are not mature. They are now getting ready for Block 1 avionics in BF-4, IIRC.
As far as the future cost for the F-35A, I think 2011 URF of ~$113 million and a 2012 URF of $96 million. This assumes a conservative reduction of 15% per year in 2009 dollars. This is predicated on the Congress approving the accelerated plan that Gates put forward.
SpudmanWP 7:33 pm on November 2, 2009 Permalink |
hehehe…
“manufacturing deficiencies” = “manufacturing efficiencies”
Damn spell check
geogen 9:10 am on November 4, 2009 Permalink |
“…in order to gauge the manufacturing efficiencies, you have to look only at the URF”
Mostly true, but other factors ultimately factor into URF too (such as cost of raw materials, labor costs and USD currency valuation). The point in this whole ‘price’ valuation argument though, is that the ‘URF’ is only one small piece of the constantly fluctuating, Total product ‘delivery’ cost charged to a customer.
I.E., Manufacturing ‘efficiency’ is simply just ‘one’ aspect to evaluate when justifying or assessing the ability to afford ‘X’ number of aircraft. Thus URF should not be the price pumped to Congress/public. (regardless of a/c type). Period.