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F-35 Program Chief Lashes Lockheed, Pratt  
User currently offlineRevelation From United States of America, joined Feb 2005, 12970 posts, RR: 25
Posted (1 year 10 months 2 days 15 hours ago) and read 7984 times:

Ref: http://news.yahoo.com/pentagon-f-35-...heed-pratt-090507792--finance.html

Quote:

The Pentagon program chief for the F-35 warplane slammed its commercial partners Lockheed Martin and Pratt & Whitney on Wednesday, accusing them of trying to "squeeze every nickel" out of the U.S. government and failing to see the long-term benefits of the project.

Hmm, what rock did Lt. Gen. Bogdan just crawl out from under?

Quote:

"What I see Lockheed Martin and Pratt & Whitney doing today is behaving as if they are getting ready to sell me the very last F-35 and the very last engine and are trying to squeeze every nickel out of that last F-35 and that last engine," Bogdan told reporters at the Australian International Airshow in southern Victoria state.

"I want them both to start behaving like they want to be around for 40 years," he added. "I want them to take on some of the risk of this program, I want them to invest in cost reductions, I want them to do the things that will build a better relationship. I'm not getting all that love yet."

Wow, is he really just waking up to the idea that he's their bitch?  


Inspiration, move me brightly!
51 replies: All unread, showing first 25:
 
User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 1, posted (1 year 10 months 2 days 11 hours ago) and read 7900 times:

He's not the first to accuse them of profiteering. Understandable given the financial situation.

Not that the government is pristine too; the US DOD has a history of planning to produce vast numbers of one type of equipment, and then cutting numbers down so much that the final number produced is a small fraction of the original planned for numbers, leaving the supplier in the lurch for the manufacturing costs.

Also, how many freaking times the government mandated changes in scope of work or technology improvements or causes delays due to late decision making, driving up costs? Too many.

Also, mentioned in the same article, price:

Quote:
Budget cuts aside, Bogdan said he was confident of bringing the cost of each plane down to around $90 million by 2013, compared to around $120 million now.

Mind you, that's in 2020 dollars, so it is factoring in inflation. Pretty reasonable price for a F-35 in 2020 dollars.


User currently offlineRevelation From United States of America, joined Feb 2005, 12970 posts, RR: 25
Reply 2, posted (1 year 10 months 2 days 1 hour ago) and read 7739 times:

Quoting ThePointblank (Reply 1):
Not that the government is pristine too; the US DOD has a history of planning to produce vast numbers of one type of equipment, and then cutting numbers down so much that the final number produced is a small fraction of the original planned for numbers, leaving the supplier in the lurch for the manufacturing costs.


It's worked the other way too: we have far more F-16s and C-17s than originally planned for. F-18s have even had a 2nd generation with a robust production run.

However it's clear that the government side causes its share of overruns.

Ideally program management would assign costs to each change order from the baseline specification so we'd know who is driving the cost up.

In short, there's too much dishonesty and ambiguity in the current process.

Both sides can blame the other whilst the taxpayer is paying for it all.



Inspiration, move me brightly!
User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 3, posted (1 year 10 months 1 day 15 hours ago) and read 7550 times:

The F-35 now costs no where near $120 million. You have to count the engine and other contracts signed years ago and add them all up. Factor all procurement contracts for LRIP-5, and the cost is over $200million each. Don't beleive me? Add them up yourself:

F-35 LRIP Lot 5 complete aircraft costs

Airframe

7/6/2010 Long-lead items $522.2m for 22 F-35A +13 F-35B +7 F-35C (42 a/c)
12/8/2010 Long-lead items $76m Additional items & materials
9/27/2011 Sustainment $187m Engineering & support
9/12/2011 Production order $4,012m Lot 5 order reduced to 30 a/c (+ UK instrumentation)
27/12/2011 Non-recurring work $485m Special tooling & test equipment
3/12/2012 Sustainment $56.3m Additional sustainment
13/04/2012 Production order $258.8m Adds 1 F-35A + 1 F-35C (total now 32 a/c)
6/04/2012 Recurring support $111.6m Training, maintenance, etc.
8/6/2012 Initial spares $209.8m
14/12/2012 Definitizes contract $127.7m For 32 aircraft

Airframe only cost $5,876.4m Average cost: $183.6m per aircraft without engine

Engines

5/6/2010 Long-lead items $138.8m
12/28/2011 Production order $1,122m 30 engines, no spares

Engine total Engine only cost $1,260.8m Average cost: $39.4m per engine

Complete a/c Airframe + engine $7,137.2m For 30 aircraft and 30 engines
Average cost: $223.03m per aircraft with engine


User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 4, posted (1 year 10 months 1 day 14 hours ago) and read 7535 times:

Quoting tommytoyz (Reply 3):
The F-35 now costs no where near $120 million.

You're right, it's $90 million including the engine in 2020 dollars. Pentagon F-35 program chief Lieutenant-General Christopher Bogdan has stated that already.

Quoting Revelation (Reply 2):
In short, there's too much dishonesty and ambiguity in the current process.

Or lack of oversight... like a $20,000 Cisco router stuffed into a one room library building in a rural town in West Virginia where the building is worth less than the router itself.


User currently offlinebikerthai From United States of America, joined Apr 2010, 2197 posts, RR: 4
Reply 5, posted (1 year 10 months 1 day 2 hours ago) and read 7372 times:

Quoting ThePointblank (Reply 4):
Or lack of oversight...

You can only do so much with oversight if your initial decision forced you down a one way street.   

Quoting ThePointblank (Reply 4):
Virginia where the building is worth less than the router itself.

. . . if the router room in the building has an awesome air conditioner  You can always throw a tarp over the router if the ceiling starts to leak   

bt



Intelligent seeks knowledge. Enlightened seeks wisdom.
User currently offlineMissedApproach From Canada, joined Oct 2004, 713 posts, RR: 2
Reply 6, posted (1 year 9 months 3 weeks 6 days 17 hours ago) and read 6971 times:

From http://www.bloomberg.com/

Boeing, Lockheed, France's Dassault Aviation SA, European Aeronautic,
Defence & Space Co. and Sweden's Saab AB will have six weeks to provide
information, Canada's Public Works Ministry said in a statement on
Sunday.


Sounds like they may lose a customer.



Can you hear me now?
User currently offlineNeutronStar73 From United States of America, joined Mar 2011, 543 posts, RR: 0
Reply 7, posted (1 year 9 months 3 weeks 5 days 2 hours ago) and read 6756 times:

As if the scores of people didn't tell the government or the military that they were going to be taken to the cleaners on this project.

Look, I support the F-35, but max profiteering was built into this program. They designed the project that way, so the government has no one but themselves to blame when it comes to the airframe cost. They helped mismanage it and LMCO wasn't going to help them right the ship.

However, there is NO EXCUSE when it comes to P&W. EVERYONE was telling them that they needed the F136 to keep Pratt honest. It was if everyone who learned from the F100 experience were shouted down and told to sit in the corner while Pratt will "take care of everything." P&W basically bought and paid for many military senior leaders to kill the alternative engine, and spent their money well in Washington to kill what I believe was a better engine in the F136 and basically lock up the military fighter engine market to themselves for decades to come.

Never mind that they did that because they couldn't compete in the commercial arena (booted out of the widebody business for the most part, beyond the GP7200 with GE, and in a dogfight with CFM in the NG narrowbody market). So they've basically narrowed GE to the F18 and some export sales, but they have the USAF, USN, USMC by the balls on the F-35, C-17, KC-46A, F-15, and half of F-16 engines.

Well done, DoD, you farking clowns.


User currently offlineOroka From Canada, joined Dec 2006, 913 posts, RR: 0
Reply 8, posted (1 year 9 months 3 weeks 4 days 20 hours ago) and read 6660 times:

Quoting tommytoyz (Reply 3):
Airframe

27/12/2011 Non-recurring work $485m Special tooling & test equipment


First is non recurring work for special tooling... not actually part of each aircraft purchase
Second is Training, maintenance... seems like money that is part of running an airforce, not buying a jet
Third spares will also apply to follow on jets... it is spares which is part of the program, not purchase price
Fourth is just finalizing the contract... steep, but not part of the purchase price.


Rolling every penny the DoD spends half way related to the F-35 into the purchase price is bull. Once the F-35 makes a sizeable portion of the air fleets, do you roll a percentage of runway repairs into the F-35s unit costs (seeing how the F-35s use the runways), or how about new carrier purchases? How about operating that CBG for the F-35? Do you roll that into the purchase price, they are pointless without a jet to fly off them.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 9, posted (1 year 9 months 3 weeks 4 days 11 hours ago) and read 6548 times:

Quoting Oroka (Reply 8):
First is non recurring work for special tooling... not actually part of each aircraft purchase

I saw after I posted that some expenses can be backed out. These I agree can be excluded:

1. 7/6/2010 Long-lead items $522.2m for 22 F-35A +13 F-35B +7 F-35C (42 a/c)
Since only 32 planes were ordered, we should reduce this expense item by 24%
Total $125 Mill backed out
2. 9/27/2011 Sustainment $187m Engineering & support
3. 3/12/2012 Sustainment $56.3m Additional sustainment
4. 6/04/2012 Recurring support $111.6m Training, maintenance, etc.
5. 8/6/2012 Initial spares $209.8m

Total: $689.7 mill / 32 = $21.55 mill per F-35 should be backed out

That still means each LRIP-5 cost over $200 million.

Even if you back out items I think are a cost of the acquisition, but you dispute, it doesn't change much. Let;s back those out too:

27/12/2011 Non-recurring work $485m Special tooling & test equipment
14/12/2012 Definitizes contract $127.7m For 32 aircraft

Additional $612.7 mill backed out of the LRIP-5 batch / 32 = $19.15 mill backed out per frame

Total adjusted F-35 LRIP-5 F-35 cost: over $180 mill each. No spare parts, requiring millions in remedial work to fix problems, without a helmet cuing system, without combat ready software and basically not combat capable.

The latest F-16, naked like this, cost well bellow $60 million. No other fighter in production anywhere today costs more than $100 million, naked like this, with no spares no training and no support equipment. The latest Rafale, with spares and support and training and equipment - is costing India something like $80 million each, similar in price to what Typhoon was bidding.


User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 10, posted (1 year 9 months 3 weeks 4 days 10 hours ago) and read 6527 times:

Quoting tommytoyz (Reply 9):
No other fighter in production anywhere today costs more than $100 million, naked like this, with no spares no training and no support equipment.

Ahem:

http://www.gao.gov/new.items/d11233sp.pdf

See page 10.

F/A-18 E/F Super Hornet: GAO calculated program acquisition unit cost (with GFE): $106.1 million.

Quoting tommytoyz (Reply 9):
The latest F-16, naked like this, cost well bellow $60 million.

Nope. Please refer to a number of recent F-16 Block 50/52 exports, such as Peace Sky. And if you want a F-16 Block 60, please refer to the UAE purchase. And the Israeli F-16's are a whole different animal altogether. I will note that current F-16 purchases are all well in excess of $60 million per aircraft for a brand new F-16.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 11, posted (1 year 9 months 3 weeks 4 days 8 hours ago) and read 6480 times:

Quoting ThePointblank (Reply 10):
GAO calculated program acquisition unit cost (with GFE): $106.1 million.

That's for the entire program, spares, support, training, spare engines, spare radars, support equipment and God knows what else........

If you want the real price of the SH alone per unit, fly away cost, you can find it here:

Selected Acquisition Report (SAR)
RCS: DD-A&T(Q&A)823-549
Dated Dec 31, 2011

That report clearly shows that the fly away price (including engines) of an F-18 SH was $71,961,000. The F-16 can only be cheaper.

Compared to the F-35 costs. The LRIP-4 cost was

$122 mill to Lockheed per unit without engines, which we know was about $39 mill to Pratt per unit. That puts the price tag for a non combat ready F-35 at more than twice the price of an F-18 SH. Those are the official numbers.

When you hear officials say the price of the F-35 is around $100 million, they're rounding in an optimistic way and not including the engine and other critical components, which other programs include. I don't think the F-35 will get very far without an engine, stealthy or not.


User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 12, posted (1 year 9 months 3 weeks 4 days 7 hours ago) and read 6467 times:

Quoting tommytoyz (Reply 11):
That report clearly shows that the fly away price (including engines) of an F-18 SH was $71,961,000.

That calculation is in FY2000 dollars... Mine is in FY2011 dollars. Calculating for FY 2011 dollars, per the GAO, Super Hornet is 106.1 million dollars in FY2011 dollars.

And FYI, the GAO in the same report I linked to stated that a LRIP F-35's program acquisition unit cost (with GFE) was $115.5 million.

This isn't the first time you didn't use apples to apples comparisons, or have left critical information out of an argument that didn't support your argument. Use an apples to apples comparison between the same fiscal years, or adjust to factor in inflation to make sure your numbers are comparable and relevant.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 13, posted (1 year 9 months 3 weeks 3 days 22 hours ago) and read 6319 times:

Quoting ThePointblank (Reply 12):
And FYI, the GAO in the same report I linked to stated that a LRIP F-35's program acquisition unit cost (with GFE) was $115.5 million.

Without engine, which is about $40 million to Pratt per unit and and missing other stuff and requiring millions in remedial work, just to fix them. You are listing the contract price per unit to Lockheed only - no engine.

On your criticism that I did not do an apples to apples comparison, let me be more specific on the actual cost of the last 75 F-18 SH that were ordered (not estimates). FYI, in your link from March 2011, the report lists entire program unit cost for the SH, covering many contracts, which is much more than just the fly away F-18 SH unit price.

Here are the actual expenditures, per unit, for the last 75 F-18 SH ordered in 2008 and finalized in 2010 - per unit:

Contract Name Airframe Multi-Year Procurement III (MYP III)
Contractor The Boeing Company
Contractor Location St. Louis, MO 63134
Contract Number, Type N00019-09-C-0019, FPIF
Award Date December 04, 2008
Definitization Date September 28, 2010

Contract Name F414 Engine Production Lots 11-15
Contractor GE Aircraft Engines
Contractor Location Lynn, MA 01905-2655
Contract Number, Type N00019-06-C-0088, FFP/FPEPA
Award Date April 26, 2006
Definitization Date September 27, 2007

$46.2 Million to Boeing per plane F-18 SH
$ 4.3 Million to GE per F414 engine (2 engines per plane)

That's $54.80 million per plane, per F-18 SH, not including spares, etc.....This is not in 2000 Dollars. But in 2010 Dollars (Definitization Date September 28, 2010).

LRIP-4 F-35s cost about $160 million with engine and not combat ready, missing vital components and needing $$ Millions more to get them combat ready and fix them. That's about 3 times the unit fly away price of an F-18 SH.

I am as clear as I can be and am not trying to omit anything or make one side look better than the other. The numbers are what they are.


User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 14, posted (1 year 9 months 3 weeks 3 days 21 hours ago) and read 6306 times:

Quoting tommytoyz (Reply 13):

I am as clear as I can be and am not trying to omit anything or make one side look better than the other. The numbers are what they are.

You are still ignoring the basic premise, in that the entire document you linked to is using the year 2000 as the base year in every calculation referring to price, so your numbers are still way off. Please review every chart and calculation and notice that every chart referring to unit cost is using BY2000 as a point of reference.

I also noticed that you did not link to the document in question, so here it is:

http://www.dod.gov/pubs/foi/logistic...0-%20SAR%20-%2031%20DEC%202011.pdf


I'm also going to up the ante here as well, and produce a similar report generated for the F-35 in December 2011:
http://www.defense-aerospace.com/dae...es/F-35Dec11FinalSAR-3-29-2012.pdf

Note that this document also cannot be directly compared to your document on the Super Hornet because it's in BY2012. But according to this document, the APUC of the F-35 is $91.827 million in 2012 dollars.

To truly make this a fair and valid comparison, we will have to convert one of the two numbers so that they both use the same fiscal year. That means we will have to adjust one or both numbers to factor in inflation between the two baseline years. I will adjust both numbers for both fiscal years to account for difference in inflation between FY 2000 and FY 2012 according to the US Consumer Price Index, provided by the US Bureau of Statistics:

BY2000:
F/A-18 E/F: $71.96 million APUC
F-35 (all variants): $69.74 million APUC

BY2012:
F/A-18 E/F: $94.75 million APUC
F-35 (all variants): $91.82 million APUC

So according to this calculation, a F-35 is cheaper than a F/A-18 E/F...

Do I need to hammer this point home some more regarding properly reviewing documents and making sure that comparisons are valid?


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 15, posted (1 year 9 months 3 weeks 3 days 16 hours ago) and read 6180 times:

Quoting ThePointblank (Reply 14):

You are still ignoring the basic premise, in that the entire document you linked to is using the year 2000 as the base year in every calculation referring to price, so your numbers are still way off.


No, that is not true. The contract for the last 75 F-18s mentioned, is the amount of Dollars appropriated in 2008 and 2010 to Boeing and GE. It does not use Base Year 2000 for those expenditures, or it would say so. But it doesn't. You are assuming things, that are not there.

When Base Year 2000 Dollars are used, as it does in some cases, they clearly say so, by indicating:

BY2000
Summary Base Year 2000
Summary then Year

Quoting ThePointblank (Reply 14):
So according to this calculation, a F-35 is cheaper than a F/A-18 E/F...


That calculation of yours is wrong. Nice try at calculating though. You are comparing 1) the cost ASSUMPTIONS made for 2,443 F-35s WITHOUT engines, against 2) the actual Dollars spent in 2008 to GE for F414 (engines) and in 2010 to Boeing for F-18 SH (plane) against one another. Basically, F-35 with no engine cost assumptions Vs. real F-18 expenditures to Boeing and GE with engines.

Even these rosy numbers have the JSF program still estimating well over $100 million per F-35 WITH AN ENGINE in BY2012 Dollars, against what a F-18 SH costs in 2010 with 2 F414 engines - which was $54 Million in 2010. It's not even close.

Go to page 26 of your linked document and you'll see the start of the cost assumptions for the F-35 engine - and start adding that to your plane costs - unless you want to hand push the plane to target.

It's not even close, even using the rosy F-35 and engine cost assumptions.


User currently offlinePowerslide From Canada, joined Oct 2010, 571 posts, RR: 1
Reply 16, posted (1 year 9 months 3 weeks 3 days 15 hours ago) and read 6165 times:

What is the point of comparing a soon-to-be obsolete 90's era fighter with poor sales to the F-35, an aircraft that will be in service with a dozen international partners and with hundreds in the US fleets. If the Super Hornet was such an amazing aircraft, and not the slow, fat, monstrosity is it now, don't you think more countries would have ordered them? This conversation is pointless. Costs are irrelevant because the two aircraft were built in different era's and are in different leagues/generations. The Super Hornet was just a poor update of a very nibble all-weather fighter, Boeing screwed up big time. To give the Super Hornet any benefits it should have been priced under $50 million a piece with everything included. When comparing it to the F-35 it doesn't stand a chance.

User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 17, posted (1 year 9 months 3 weeks 3 days 12 hours ago) and read 6113 times:

Quoting Powerslide (Reply 16):
To give the Super Hornet any benefits it should have been priced under $50 million a piece

An F-18 SH is $54.80 Million a piece with engines - fly away - and that's not cheap. An F-16 is cheaper. I think if you are doing a cost benefit analysis on the F-18SH, don't you think such a cost benefit analysis should be done on the F-35? Especially in times of shrinking defense budgets?

The attempts to deny the true expense of the F-35 is silly. At least $120 million with engines and combat ready, based on optimistic projections, is top of the line expensive. And there is a decent risk, that the F-35 will be even more expensive than that. Then what? Defense money is limited. That is the reality.


User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 18, posted (1 year 9 months 3 weeks 3 days 11 hours ago) and read 6105 times:

Quoting tommytoyz (Reply 15):
That calculation of yours is wrong. Nice try at calculating though. You are comparing 1) the cost ASSUMPTIONS made for 2,443 F-35s WITHOUT engines, against 2) the actual Dollars spent in 2008 to GE for F414 (engines) and in 2010 to Boeing for F-18 SH (plane) against one another. Basically, F-35 with no engine cost assumptions Vs. real F-18 expenditures to Boeing and GE with engines.

Again, you fail to understand the calculation or even basic purchasing for that matter.

I compared APUC to APUC, adjusted for inflation. APUC has the same basket items, no matter what you are purchasing. APUC is calculated by dividing total procurement cost by the number of articles to be procured. Total procurement cost includes flyaway, rollaway, sailaway cost (that is, recurring and nonrecurring costs associated with production of the item such as hardware/software, systems engineering (SE), engineering changes and warranties) plus the costs of procuring technical data (TD), training, support equipment, and initial spares.

Therefore, I compared two equivalent baskets of goods. I then made sure both numbers are of the same baseline year. As a buyer and purchasing agent myself, I fully understand the importance of making sure that people understand procurement practices, contracts and terminology when the contracts are reviewed by management or by outside parties. I also make sure all numbers presented for review are equivalent so informed decisions are made by management based upon a common set of number calculations.

Quoting tommytoyz (Reply 15):

No, that is not true. The contract for the last 75 F-18s mentioned, is the amount of Dollars appropriated in 2008 and 2010 to Boeing and GE.

I reviewed the contracts that you mentioned; there has been MANY numerous modifications to the contact that hasn't been reflected in your document.

Several things need to be taken into account when looking at fighter contracts:
1. Were there later changes and cost increases made?
2. Does it include all the equipment?
3. You never hear about the small stuff.

To answer #1, there have been many changes to the latest MYB Super Hornet purchase. Here are a select few, in chronological order, starting with the initial buy (keep an eye on that "N00019-09-C-0019" as it's the contract number:

Quote:
Sep 28th, 2010: The Boeing Co., St. Louis, Mo., is being awarded a $5,297,000,000 modification to convert the previously awarded advance acquisition contract (N00019-09-C-0019) to a fixed-price-incentive-fee multi-year contract. In addition, this modification provides for the procurement of 46 F/A-18E, 20 F/A-18F, and 58 EA-18G airframes for the Navy.

Dec 22nd, 2310: The Boeing Co., St. Louis, Mo., is being awarded an $11,704,208 modification to a previously awarded fixed-price-incentive-fee contract (N00019-09-C-0019) to provide non-recurring engineering in support of the F/A18E/F and EA-18G Multi-Year III procurement.

Feb 28th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $29,500,000 modification to a previously awarded fixed-price-incentive-fee contract (N00019-09-C-0019) for the procurement of aircraft armament equipment for F/A-18E/F and EA-18G aircraft, including jumper bundles, pylon attach fittings, sensor well covers, adaptors, and plyons.

Mar 30th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $40,000,000 modification to a previously awarded fixed-price-incentive-fee contract (N00019-09-C-0019) for non-recurring engineering services in support of the next generation advanced mission computer system for the F/A-18E/F and EA-18G aircraft.

Jun 13th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $408,753,999 ceiling-priced modification to a previously awarded fixed-price-incentive-fee contract (N00019-09-C-0019) for the full rate production and delivery of nine fiscal 2011 (LOT 35) F/A-18E aircraft in accordance with the aircraft variation in quantity clause.

Jul 13th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $53,656,542 modification to a previously awarded firm-fixed-price contract (N00019-09-C-0019) for the procurement of aircraft armament equipment for F/A-18E/F and EA-18G aircraft, including jumper bundles, pylon attach fittings, sensor well covers, adaptors, pylons, and tooling.

Aug 30th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $16,881,855 modification to a previously awarded firm-fixed-price, fixed-price -incentive contract (N00019-09-C-0019) for non-recurring and recurring engineering in support of Engineering Change Proposal 6213R2, “Trailing Edge Flap Honeycomb Redesign” of the F/A-18 E/F and EA-18G aircraft.

Sep 15th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $7,671,795 modification to a previously awarded firm-fixed-price contract (N00019-09-C-0019) for the procurement of F/A-18 E/F and EA-18G aircraft armament equipment, to include: 174 station control units; 22 aerial refueling store (ARS) suspension lugs; 12 centerline feed through plates; 11 ARS air probes; 11 ARS fuel probes, six ALE-50 dispensers towed decoys; six ALE-50 chassis towed decoys; six ALE-50 protector towed decoys; four ALR-67 mounting base radar warning receivers; and four ALR-67 mounting retainers radar warning receivers.

Sep 15th, 2011: The Boeing Co., St. Louis, Mo., is being awarded a $7,331,483 modification to a previously awarded firm-fixed-price contract (N00019-09-C-0019) to continue development of the new Advanced Mission Computer (AMC) Type 4 System for the F/A-18E/F and EA-18G aircraft. This modification will also begin the necessary customization of the AMC for use in Navy F-18 aircraft.

I could keep going, but you get the picture. The initial contract is NEVER the final price.

The GE F414-GE-400 ongoing contract is number N00019-06-C-0088:

Here are a few of those announcements:

Quote:
Mar 22nd, 2011: General Electric Aircraft Engines, Lynn, Mass., is being awarded a $246,520,390 modification to a previously awarded firm-fixed-price contract (N00019-06-C-0088) to exercise an option for 68 Lot 15 F414-GE-400 engines and device kits for the F/A-18E/F aircraft.

May 11th, 2011: General Electric Aircraft Engines, Lynn, Mass., is being awarded an $18,394,537 modification to a previously awarded firm-fixed-price contract (N00019-06-C-0088) for engineering and integrated logistics services in support of the F/A-18E/F F414-GE-400 engine.

May 12th, 2011: General Electric Co., Aircraft Engines Business Group, Lynn, Mass., is being awarded a $9,224,267 modification to a previously awarded firm-fixed-price contract (N00019-06-C-0088) for the procurement of one F414-GE-400 Spare Engine; eight combustion modules, seven fan modules, and one high pressure turbine module for the F/A-18E/F aircraft.

Aug 1, 2011: General Electric Aircraft Engines, Lynn, Mass., is being awarded a $71,484,930 modification to a previously awarded firm-fixed-price contract (N00019-06-C-0088) to exercise an option for the supplemental engine requirement to procure (18 ) F414-GE-400 engines and (18 ) F414-GE-400 engine device kits.

Nov 30th, 2011: General Electric Aircraft Engines, Lynn, Mass., is being awarded a $29,703,712 modification to a previously awarded firm-fixed-price contract (N00019-06-C-0088) for eight F414-GE-400 spare engines for the F/A-18E/F aircraft.

Then there is #3, the small stuff. Only contracts of over $5 mil appear on the http://www.defense.gov/Contracts/ site.

When you consider all these things, you will realize why you NEVER go by just the initial contract as budget numbers (especially covering past years) are much more accurate.

FYI, the Navy is extremely notorious about hiding the real costs of weapons systems in budget docs - and of course, has to pay the fiddler later on when the product is actually delivered. Hence all the hoopla in recent years within the GAO and Congress about the Navy's "Total Ownership Costs" because, until now, they have been dramatically underestimated in the up-front analysis coming out of the acquisition system. The GAO has actually said so to that effect in the past here:

http://www.gao.gov/assets/160/155498.pdf

The GAO also made clear in several places in the doc that the Navy's story about costs hardly passed the smell test. Quote:

Quote:
The $43.6 million (fiscal year 1996 dollars) unit recurring flyaway cost estimate for the F/A-18E/F is understated. The estimate is based on a 1,000-aircraft total buy that is overstated by at least one-third because the Marine Corps does not plan to buy the E/F and an annual production rate that the Congress has stated is probably not possible due to funding limitations. Reducing the total buy and annual production rate will increase the unit recurring flyaway cost of the F/A-18E/F from $43.6 to $53.2 million (fiscal year 1996 dollars).

When the estimated Super Hornet development costs increased nearly 30% in one year, Congress put a $5.8B billion dollar cap on Super Hornet development costs and also mandated a unit cost cap as a ratio (1.25) versus a later Lot C/D. The Navy simply moved dropped a number of development items off the program and rolled them into the legacy Hornet as an system upgrade, then rolled them back up to the Super Hornet.

[Edited 2013-03-07 20:08:12]

User currently offlinePowerslide From Canada, joined Oct 2010, 571 posts, RR: 1
Reply 19, posted (1 year 9 months 3 weeks 3 days 11 hours ago) and read 6104 times:

Quoting tommytoyz (Reply 17):
An F-18 SH is $54.80 Million a piece with engines - fly away - and that's not cheap.

I like how you cut the rest of my sentence. What god damn good is a fighter aircraft at a "fly away" cost? They aren't built for airshows.  
Quoting tommytoyz (Reply 17):
At least $120 million with engines and combat ready, based on optimistic projections, is top of the line expensive.

Compare that to anything else as advanced, which is nothing at the moment since no one else is building NEW 5th gen aircraft, not even Europe, $120million, or $91million as already pointed out several times by PB, becomes extremely affordable.

Quoting tommytoyz (Reply 17):
And there is a decent risk, that the F-35 will be even more expensive than that.

And there is a very good chance that the F-35 will become cheaper to buy as times goes on and more are built, like with almost every other manufacturing product in the industrial world.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 20, posted (1 year 9 months 3 weeks 3 days 9 hours ago) and read 6078 times:

Quoting Powerslide (Reply 19):
What god damn good is a fighter aircraft at a "fly away" cost

Better than push away costs, which is what a $91 Million F-35 is, without an engine. Even that dreamy $91 Million figure is a rosy estimate. Currently the F-35 push away cost is well over $120 Million. F-35 fly away cost is over $160 Million.

Quoting ThePointblank (Reply 18):
I compared two equivalent baskets of goods.

No, You consistently compared the cost of the F-35 without an engine (push away costs), to the F-18SH costs with engines (fly away). Hardly comparable. And one based on estimates and the other on actual expenditures...also not comparable.

Secondly 2000 Dollars would be less than 2008/10 Dollars, - not more as you "calculated".

A refresher: BY2000 Dollars were worth more than BY2010 Dollars - that's how inflation works. As time goes FORWARD, the Dollar amounts increase. As you go back in time, they decrease.

Maybe you want to calculate again, how many BY2000 Dollars are, when converted from $54 BY2010 Dollars? Hint: Less then $54 Million, not more.


User currently offlineThePointblank From Canada, joined Jan 2009, 1859 posts, RR: 0
Reply 21, posted (1 year 9 months 3 weeks 3 days 9 hours ago) and read 6066 times:

Quoting tommytoyz (Reply 20):
No, You consistently compared the cost of the F-35 without an engine (push away costs), to the F-18SH costs with engines (fly away). Hardly comparable.

I compared APUC to APUC. The definition of APUC (Average Procurement Unit Cost) is the SAME between the F-35 and Super Hornet, and this definition is legally defined. APUC has a very set and defined basket of goods per the DoD. I gave the DoD's definition of APUC above. One cannot play loose with the definition and what basket of goods is included under APUC in a procurement program otherwise heads are going to roll.

You are either not understanding that point, or are deliberately being obtuse. A F-35's APUC has the same set of costing items as the Super Hornet's APUC. And likewise, the Program Acquisition Unit Cost (PAUC) should not and cannot be compared to APUC, and any other costs involved.

You either do not understand the point being made here because you have repeatedly in the past compared different types of costing to each other without understanding what each cost means and in what context should these costing numbers be compared to. That is why I ignore costing numbers from a variety of sources until I have a set of costing numbers that uses the same pricing model and methodology of calculation.

This is basic procurement principles; if a procurement official in my office ever came to me and presented costing comparisons like you did in a major project, that person would be in serious trouble with me, with disciplinary consequences (written up, suspended, or fired depending on how bad it was). You simply do not make this type of an error in a procurement setting, especially in my office.

I am not going to argue this point again because this is heavily off-topic and turning into a flame fest.

Quoting tommytoyz (Reply 20):
Secondly 2000 Dollars would be less than 2008/10 Dollars, - not more as you "calculated".

Review the numbers again:

BY2000:
F/A-18 E/F: $71.96 million APUC
F-35 (all variants): $69.74 million APUC

BY2012:
F/A-18 E/F: $94.75 million APUC
F-35 (all variants): $91.82 million APUC

I don't know if you misread the data, but BY2000's numbers are less than BY2012's numbers. The numbers were correctly calculated using the Consumer Price Index between the two years.


User currently offlinePowerslide From Canada, joined Oct 2010, 571 posts, RR: 1
Reply 22, posted (1 year 9 months 3 weeks 3 days 2 hours ago) and read 5990 times:

Quoting tommytoyz (Reply 20):
F-35 fly away cost is over $160 Million.

Keep making up numbers with no substantiation.

[Edited 2013-03-08 05:47:29]

User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 23, posted (1 year 9 months 3 weeks 1 day 23 hours ago) and read 5620 times:

Air Force acquisition executive David Van Buren and F-35 Joint Program Office chief Vice Admiral David Venlet told a U.S. Congressional committee hearing this week that their latest cost estimates are credible, after the various recent reviews.

The 31 aircraft recently contracted in low-rate initial production (LRIP) Lot 4 at fixed prices will each cost $111.6 million (F-35A), $109.4 million (F-35B) and $142.9 million (F-35C), they reported. These figures exclude the cost of the F135 engines, which are procured separately from Pratt & Whitney.


- March 2011

And.........

Based on the LRIP IV contract, the target prices of the three F-35 variants without engines
are as follows: conventional takeoff and landing (CTOL)—$111.6 million; Short takeoff and
vertical landing (Stovl)—$109.4 million and carrier variant (CVs)—$142.9 million. Though
Stovl appears to cost the least, the per-unit engine price is the highest.

Costs for current lot of low-rate initial production (LRIP-4) aircraft were reported to be 7%-10%
above the contract’s target cost of $3.46 billion, with the government and Lockheed Martin due to
split the expected overage evenly.

Procurement cost of the 19 F-35As requested for FY2013 in the Air Force budget is estimated at
$3,353.3 million, or an average of $176.5 million each.


Congressional Research Service
7-5700
www.crs.gov
RL30563
March 16, 2012

The cost to fix 63 F-35s for $373 Million or $6 million each:

In addition to contract overruns, concurrency costs of at least $373 million have been incurred on production aircraft to correct deficiencies found in testing. The manufacturing process is still absorbing higher than expected number of engineering changes resulting from flight testing, changes which are expected to persist at elevated levels into 2019, making it difficult to achieve efficient production rates. More design and manufacturing changes are expected as testing continues, bringing risks for more contract overruns and concurrency costs. Even with the substantial reductions in near-term production quantities, DOD still plans to procure 365 aircraft for $69 billion before developmental flight tests are completed.

Which is why:

Since 2002, the total quantity through 2017 has been reduced by three-fourths, from 1,591 to 365.
GAO-12-437
June 2012

Spin away.........


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 24, posted (1 year 9 months 3 weeks 13 hours ago) and read 5378 times:

http://articles.chicagotribune.com/2...09_1_cost-overruns-fifth-batch-gao

New GAO report:

Industry executives and military officials say U.S. moves to defer orders for 410 aircraft in recent years have already jacked up the cost per plane, and costs will rise further unless Congress averts $500 billion in mandatory defense spending cuts slated to take effect over the next decade. Those cuts began to roll in last week.

GAO said the Pentagon's Cost Analysis and Program Evaluation office had calculated that the average cost of the plane, which has already nearly doubled to $137 million from $69 million originally estimated, would rise by 6 percent if all 697 foreign orders vanished.

The program faces substantial costs to retrofit planes to address problems discovered in flight testing, GAO said.

Such "rework" would add $900 million to the cost of the first four batches of jets build by Lockheed, GAO said, plus about $827 million over the next six batches for a total of $1.7 billion.

Last June, GAO had forecast rework costs of $373 million for the first four batches of jets, but gave no estimate for the remaining batches.


So the rework is going to cost $15 million per LRIP plane, about 3 x what was estimated 9 months ago. Can anything be believed that comes from the Pentagon's Cost Analysis and Program Evaluation office or LM and Pratt on the F-35? The entire program has no credibility left when they revise rework estimates upwards by 300% within 9 months.

That $137 million per F-35 cost figure over almost 3,000 frames will never be hit, IMHO. Because the numbers built will be far less than now anticipated and the ritual of estimating way too low. The engine is also over budget.

The F-35 program chief is right to lash out.

[Edited 2013-03-10 19:29:14]

25 JoeCanuck : Look at 3 recent programs which were reduced or eliminated when costs ran amok. B-2-Planned-132, In Service-19 F-22-Planned-750, In Service-187 Coman
26 Post contains links and images ThePointblank : Problem is that if the US cuts F-35 orders, the entire USAF, USN, and USMC tactical air fleet is effectively neutered. The USAF, USN and USMC are loo
27 kiwirob : You do know that the current Norwegian govt have been sandbagging and refusing to admit the cost of F-35 to the Norwegian public, they will not discu
28 ThePointblank : Norway won't cancel for a number of reasons: 1. The long term lead items for the first Norwegian F-35 is already ordered. Their aircraft are allocate
29 tommytoyz : Your opinion, that the USAF is looking to do sacrifice other programs for the F-35, is illegal under US law. They can't do that. We already went over
30 ThePointblank : The USAF has already requested from Congress the ability to shift funds from other programs into F-35. There's bi-partisan support for the F-35 progr
31 kiwirob : So far they have only ordered 4, if they do order more I very much doubt there will any anywhere near 52 of them flying for Norway.
32 kanban : I think you will find that long lead items covering the current Norwegian line position have been ordered.. these will not have separate identificati
33 ThePointblank : On the issue of fixing LRIP aircraft: Do realize that early production aircraft for many new fighters did not see extensive service; for example, with
34 tommytoyz : Is that fact going to make any difference to the price of fixing LRIP F-35s? Or are you advocating not fixing them at all and scrapping the first 365
35 ThePointblank : How many early production F-16's remain in service from the initial 3 blocks (Blocks 1, 5, 10)? I will tell you that 603 F-16 Blocks 1, 5, and 10 wer
36 tommytoyz : 1. None of what you said is going to reduce the $15 million in costs just to fix each of the 365 LRIP F-35s. 2. None of the 365 LRIP F-35s will be us
37 ThePointblank : With F-35, there will be only 1 production standard. New weapons, systems can be applied across all variants of the F-35, unlike previous generation
38 Post contains links and images ThePointblank : JSM has been check fitted on the F-35's external station: http://www.regjeringen.no/en/dep/fd/...sm-fitted-on-the-f-.html?id=717070
39 Post contains links tommytoyz : Last week, Saab’s Gripen NG, along with Boeing’s F/A-18 Super Hornet, Eurofighter Typhoon and the Joint Strike Fighter program office were officia
40 Oroka : Nope. Politicians and headline grabbing journalists are forcing governments to reassess the competitions offerings. The F-35 will still be the best v
41 checksixx : I want these businesses to charge a lot less for these advanced capabilities we're asking for. These businesses shouldn't be in 'business' but rather
42 kanban : careful that statement may end up applying to the precious F-35.
43 fbwless : Maybe for SH or Typhoon but not for Gripen E. Both acquisition and operational costs are much lower than all other 4.5 gen fighters. F-35 for Denmark
44 Powerslide : Gripen E doesn't exist. How can you say that, with a straight face, when one production aircraft hasn't flown yet. No one knows what sort of problems
45 Post contains links fbwless : Swedish and Swiss air forces have been offered fixed price deals that includes fly-away fighters, training and support. Maintenance projections are b
46 Powerslide : They are considering anything at this point, just to shut up the opposition. Hell, even they don't really care what we buy as they haven't offered an
47 Oroka : lol, the legacy 4.5 gen fighters WILL be obsolete, the F-35 is far more advanced and relevant than anything else out there. Even competing foreign de
48 fbwless : Spot on! I'm convinced that there are a lot of countries out there that are willing to sacrify stealth and performance capability for their fighter j
49 Post contains images bikerthai : Historically, has Canada ever bought a front line fighter plane at the beginning of the program? They may get their F-35. But it may take another 10
50 ThePointblank : F/A-18 Hornet. We selected it while it was still in development, and we IOC at roughly the same time as the USN.
51 ThePointblank : Unless the Government wants to replace any 4.5 gen fighter after maybe 20 years of service with another fighter, instead of using a 5th generation ai
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