Thanks Bruce for sending me this article!
UPDATE: Check out the comment from the Speech Writer/Deputy Communications Director from the US House Armed Services Committee. BlackFive has the ears of policy makers on Capital Hill. I'm beyond impressed.
Gentlemen, I present to you the real truth on F-35 costs. Not the fantasy land dribble spouted by some, but the stone cold truth...and its from none other than one of the big boys on the internet when it comes to defense issue---
Black Five! I shamelessly post the article in its entirety here. Read it and weep F-35 critics.
If you've been paying attention to the battle for US air dominance,
you might be, like me, a little wary of the comparisons and the
rhetoric. Since there are numbers flying all over the place with
regards to cost (mostly from PR firms), I thought we ought to take a
look at what the REAL cost of an F-35 is...and we'll look at it in the
same terms that the DoD/USAF use to evaluate the bids.
First, we need to talk in terms of 2010 dollars. We’re talking about
what is known as the Unit Recurring Fly Away cost (URF) for a
conventional take-off and landing (CTOL) variant (the type the Air Force
is buying). In 2010 terms, it will cost about $65 million dollars.
Whoa, wait a minute, you say, I’ve seen costs as high as $110 million a copy!
I’m
sure you have. But they don’t reflect the URF. Instead they may
reflect the Total Ownership Cost (TOC) - the cost of everything
necessary to operate the aircraft over the span of its service life - or
any of a number of other costs used in the project for various
purposes, but it won’t reflect the one we should be most concerned with,
the URF.
Confused yet?
Think of buying a new car.
You go in, look at the sticker price and ask the sales person, “how much
will it cost me to drive this car off the lot?” He or she is going to
give you a cost at or near the sticker price. You’re going to
negotiate it down and, if you strike a deal, you’ll drive it off the lot
for that negotiated price. That’s the URF in a nutshell.
With me so far?
But does that cost reflect the TOC?
Of course not.
Gas and oil. Extra cost. Maintenance. Extra cost. Extended
warranty. Extra cost. Parts. Extra cost. Labor. Extra cost. New
tires. Extra cost. Etc. In fact, if you take all of those costs
associated with owning, driving and maintaining the car over the years
you own it you’ll find that TOC to be significantly higher than the cost
to drive it off the lot (URF).
Of course that’s the case for
any fighter aircraft. However, in the media, the price you see applied
to the F-35 may reflect the higher TOC and not the URF. When such a
cost basis is used without identifying it, you end up comparing apples
and pomegranates. The TOC is not what it will cost to fly the plane off
the lot.
As an example, imagine the original cost of the B-52.
Now imagine – with the aircraft having been in constant service for 50
years or more – the total cost of ownership. The difference is going
be huge. We could easily see a difference of several hundred million
dollars per aircraft between URF and TOC as fuel, maintenance, upgrades,
modifications, parts, labor, crew costs, and basing costs are all added
to the aircraft’s original price, correct? Imagine seeing the TOC for a
B-52 represented as the URF. You’d say “no way, we can’t afford it”.
So,
given that understanding, what will it cost us to fly the aircraft off
the dealer’s lot (URF)? Again, in 2010 dollars, assuming all the
aircraft originally contracted for are bought (2,443) and production can
begin in a timely manner, a CTOL variant F-35 is going to cost $65
million to fly away. The Marine variant, the STOVL (Short Take Off
Vertical Landing) will be in the $75 million range and the CV version
(more robust frame/undercarriage built for carrier operations) for the
Navy in the $70ish million range.
I briefly talked about other
versions of cost associated with this or any other defense project.
They are only meaningful within the government/defense procurement
community and are used in reporting and monitoring each program within
that community. They have no real relevance to the URF but are
sometimes quoted in the media as reflecting that price. They provide
another example of the wildly divergent costs we see.
As an
example, one cost used is APUC or Average Process Unit Cost.
Essentially they take the URF and add some other costs to it (see chart)
to arrive at that cost. There’s another called PAUC or Program
Acquisition Unit Cost. Again, in the case of PAUC, URF has some
selected costs added to it to arrive atthe particular cost. They’re not
costs we should be concerned with as they deal more with program costs
over the life of the aircraft (as well as some R &D costs) than the
eventual cost per plane to fly away. If you see a cost of $93 million
per copy floating around out there, for instance, it is likely the PAUC
cost as reflected in the chart. Again, that’s not the cost per plane to
fly it away (URF).
Finally, just because it is interesting, let’s talk about something else associated with cost and also not properly compared.
So,
I think we can agree that we can fly an Air Force F-35 CTOL away for
about $65 million (2010 dollars). But I can fly a 4th generation
fighter away for, say, $50 million – why not build a whole bunch of
those for less money?
Two reasons – they’re significantly
inferior in technology and not very stealthy at all. And that $50
million really doesn’t reflect the true cost – not if you want to do
anything with the aircraft other than just fly it around. The F-35 as
delivered is mission capable. That means it comes with everything
already on board to fly missions in combat. It’s combat ready. The 4th
generation fighter? Extra cost is required to make it combat ready.
You get a basic 4th generation fighter for the quoted price and then
have to buy, at extra cost, what is necessary to configure it for
combat. Once you pay to configure a 4th gen fighter to be mission
capable, i.e., buy what it needs to do its mission in combat, its cost
is pretty close to the same as a CTOL F-35 and it is still an inferior
aircraft.
Bottom Line: The actual cost to get a new Air Force
F-35 into service is about $65 million (2010 dollars). Claims of higher
costs for an Air Force F-35 are usually misleading attempts to include
years of operating and maintenance costs (costs applicable to all
aircraft across the board regardless of generation) in the purchase
price.
Just thought that you should be aware of that.
Let's hear what you think about this in the Comments.
Update 1: Just heard from the House Armed Services Committee on this post:
Just to piggyback, the Committee is expected to pass an Amendment to
the National Defense Authorization Act today that authorizes GE-Rolls
Royce to self fund their F35 engine. Since the F35 contract will last 3
decades, the Pentagon originally planned for an annual competition for
sustainment and procurement costs. The short term cost of developing
the GE engine was deemed too high by the Defense Department, and they
canceled the program, ignoring the hazards in handing a $1 billion
engine contract to a monopoly. With the Pratt & Whitney engine is
already $3.5 billion over budget and wrought with thrust and nozzle
problems, the General Electric proposal to pay out of pocket couldn’t
have come at a better time.
So in the spirit of your post, today Congress is in a unique
position to significantly mitigate the costs of the F-35 program, with
no further financial obligation from the Pentagon. We get taxpayer free
competition for JSF engine contracts, avoid the pitfalls of a $100
billion Pratt & Whitney monopoly that’s already taking Congress to
the bank, keep thousands of employees working, and finally will start
to reap the rewards of industry-led acquisition reform. In short, the
precise type of reform that the Pentagon and Congress have been
pleading with the defense industry to institute for years.
John Noonan
Speechwriter & Deputy Communications Director
U.S. House Armed Services Committee
Update 2: Got a question about how much the ball park cost for upgrading a 4th gen fighter to combat mission capable?
$10-15,000,000 which makes it about the same cost as the F35. But
you don't get the next gen technology, weapons, capabilities, etc. for
that price.
Wow.
Just f*cking wow.
We've all been deceived. And those that were spouting the various falsehoods know better.
Amazing.