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bikerthai
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Re: T-7A Red Hawk News and Discussion Thread

Sat Dec 18, 2021 12:46 pm

texl1649 wrote:
Sure, it could be (a). I sure wouldn’t bet on it, though.


Yup, Boeing can screw up on a number of fronts. But the digital design and manufacturing aspect is real.

Was able to see their early R&D proof of concept model a few years back (about a year before they won the MQ-25 contract). It is no slight of hand as the tech is being ported to the commercial side and will one of the core tech of the new clean sheet 737/757 replacement.

Note that their Loyal Wingman and MQ-25 are built using the same process. They came together just as quick. So this process is not a fluke.

bt
 
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HowardDGA
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Re: T-7A Red Hawk News and Discussion Thread

Sat Dec 18, 2021 6:43 pm

RJMAZ wrote:
This leaves Lockheed and Northrop Grumman as the only remaining option.


What about Embraer?
 
RJMAZ
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Re: T-7A Red Hawk News and Discussion Thread

Sun Dec 19, 2021 3:05 am

HowardDGA wrote:
RJMAZ wrote:
This leaves Lockheed and Northrop Grumman as the only remaining option.


What about Embraer?

No chance. Brazil has ordered 72 Gripen.

Brazil had no faith in Embraers ability to make a light fighter after the C-390 disaster.
 
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kitplane01
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Re: T-7A Red Hawk News and Discussion Thread

Sun Dec 19, 2021 7:04 am

RJMAZ wrote:
HowardDGA wrote:
RJMAZ wrote:
This leaves Lockheed and Northrop Grumman as the only remaining option.


What about Embraer?

No chance. Brazil has ordered 72 Gripen.

Brazil had no faith in Embraers ability to make a light fighter after the C-390 disaster.


In 2010 they announced planes to have a prototype in 2014. In 2014 they flew the prototype.
They developed the largest plane (I think) ever made on the whole continent on time.
You should see what Boeing or even H.A.L do!
(Seriously, what disaster?)
 
RJMAZ
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Re: T-7A Red Hawk News and Discussion Thread

Sun Dec 19, 2021 7:37 am

kitplane01 wrote:
In 2010 they announced planes to have a prototype in 2014. In 2014 they flew the prototype.
They developed the largest plane (I think) ever made on the whole continent on time.
You should see what Boeing or even H.A.L do!
(Seriously, what disaster?)

How about 22 orders.. :lol:

Billions of Brazilian government money invested. Columbia and Argentina did a runner. Embraer provided unrealistic projections predicting 300+ aircraft sold. The dreaded death spiral has already begun. Production has been slowed to a snails pace so that the line can stay running for a few more years hoping to capture further orders.

The initial investment by Embraer has been spread out over a large production number for accounting purposes. When that is production number is revised downwards it will be a massive financial write off. We saw this with the 747-8, A380 programs.

The E2 program is also currently getting dominated by the A220. So it is doom and gloom at the company.

Boeing walked away from the partnership deal because Embraer has very little and rapidly declining value.
 
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kitplane01
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Re: T-7A Red Hawk News and Discussion Thread

Sun Dec 19, 2021 6:47 pm

RJMAZ wrote:
kitplane01 wrote:
In 2010 they announced planes to have a prototype in 2014. In 2014 they flew the prototype.
They developed the largest plane (I think) ever made on the whole continent on time.
You should see what Boeing or even H.A.L do!
(Seriously, what disaster?)

How about 22 orders.. :lol:

Billions of Brazilian government money invested. Columbia and Argentina did a runner. Embraer provided unrealistic projections predicting 300+ aircraft sold. The dreaded death spiral has already begun. Production has been slowed to a snails pace so that the line can stay running for a few more years hoping to capture further orders.

The initial investment by Embraer has been spread out over a large production number for accounting purposes. When that is production number is revised downwards it will be a massive financial write off. We saw this with the 747-8, A380 programs.

The E2 program is also currently getting dominated by the A220. So it is doom and gloom at the company.

Boeing walked away from the partnership deal because Embraer has very little and rapidly declining value.



The Brazilian government has greatly reduced support and orders, and yet still Embraer makes progress. My reading says the Brazilian government has decided to save the money, but the C-390 is everything promised.
 
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HowardDGA
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Re: T-7A Red Hawk News and Discussion Thread

Mon Dec 20, 2021 6:22 am

RJMAZ wrote:
HowardDGA wrote:
RJMAZ wrote:
This leaves Lockheed and Northrop Grumman as the only remaining option.


What about Embraer?

No chance. Brazil has ordered 72 Gripen.

Brazil had no faith in Embraers ability to make a light fighter after the C-390 disaster.


How does the T-7A cost compare to the Gripen? 19 million versus 30 million, optimistically?

I was actually thinking of something like the AMX. A Leonardo-Embraer program might be successful.
 
RJMAZ
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Re: T-7A Red Hawk News and Discussion Thread

Mon Dec 20, 2021 7:26 am

HowardDGA wrote:
How does the T-7A cost compare to the Gripen? 19 million versus 30 million, optimistically?

I was actually thinking of something like the AMX. A Leonardo-Embraer program might be successful.

The Gripen is only cheap in terms of hourly operating cost. The purchase price is similar to a medium sized fighter.

Estimates have the Gripen E around $80 million fly away. With some posts as high as $100 million. It is the Gripen C sales of used and refurbished aircraft that make people think it is cheap.

The Super Hornet, Block 70 F-16, F-35A and Saab Gripen are all approximately the same purchase price. The Gripen has the lowest hourly operating cost and the F-35A is highest because it is stealth and also the most capable. The Gripen will be then be the cheapest to operate for 20 years.

An armed T-7 will have low operating costs but also a low purchase price. The Boeing T-7 trainer version has a flyaway price around $25 million. I expect an armed version with AESA to be around $40 million or half the purchase price of the Gripen.

The armed T-7 should have an even lower hourly operating cost than the Gripen due to its more modern and slightly lighter design.

Even if Boeing goes all out and makes the T-7 a single seat with EODAS, AESA and installs a F414 engine it should still be under $50 million.
 
art
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Re: T-7A Red Hawk News and Discussion Thread

Tue Dec 21, 2021 12:08 am

RJMAZ wrote:
HowardDGA wrote:
RJMAZ wrote:
This leaves Lockheed and Northrop Grumman as the only remaining option.


What about Embraer?

No chance. Brazil has ordered 72 Gripen.

I'm sure they will but right now I think they have only ordered 36.
 
Avatar2go
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First T-7a Redhawk Trainer rolls out in St Louis

Fri Apr 29, 2022 6:58 am

The first production version of the USAF T-7a Redhawk has come off the assembly line in St Louis. It will now undergo ground testing prior to flight testing and eventual delivery. One of 350 ordered with options for 100 more. Also a modified version, the T-7B, is a contender for the USN trainer program.

This aircraft will replace the USAF T-38 Talon, and if selected by the USN, the T-45 Goshawk.

https://www.af.mil/News/Article-Display ... rolls-out/
 
mxaxai
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Re: T-7A Red Hawk News and Discussion Thread

Tue May 03, 2022 7:07 am

Since this might get lost in the CivAv thread:
Boeing booked a big loss for the T-7A project in 1Q22. https://leehamnews.com/2022/04/27/boein ... ntil-2025/
Boeing Defense recorded [...] $367 million in charges on its T-7 Red Hawk trainer program.
...
Supply costs, the ongoing COVID-19 pandemic and inflation are driving up costs on the T-7 trainer replacement program, according to Boeing’s SEC filing.

The risks of a long term fixed-price contract
 
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kitplane01
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 4:37 am

mxaxai wrote:
Since this might get lost in the CivAv thread:
Boeing booked a big loss for the T-7A project in 1Q22. https://leehamnews.com/2022/04/27/boein ... ntil-2025/
Boeing Defense recorded [...] $367 million in charges on its T-7 Red Hawk trainer program.
...
Supply costs, the ongoing COVID-19 pandemic and inflation are driving up costs on the T-7 trainer replacement program, according to Boeing’s SEC filing.

The risks of a long term fixed-price contract


Has Boeing in the recent decades had any fixed price contracts that did'n't run over budget?
 
Avatar2go
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 5:36 am

kitplane01 wrote:
mxaxai wrote:
Since this might get lost in the CivAv thread:
Boeing booked a big loss for the T-7A project in 1Q22. https://leehamnews.com/2022/04/27/boein ... ntil-2025/
Boeing Defense recorded [...] $367 million in charges on its T-7 Red Hawk trainer program.
...
Supply costs, the ongoing COVID-19 pandemic and inflation are driving up costs on the T-7 trainer replacement program, according to Boeing’s SEC filing.

The risks of a long term fixed-price contract


Has Boeing in the recent decades had any fixed price contracts that did'n't run over budget?


The issue occurs when development and production are included under the same contract terms. If the contract is cost-plus, the government suffers from risk of higher production costs. If the contract is fixed-cost, the vendor suffers from risk of higher development costs. So increasingly there is a focus on hybrid contract terms, that lean more toward cost sharing for development, and toward fixed-cost for production, once the risk has been retired.
 
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kitplane01
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 9:07 am

Avatar2go wrote:
kitplane01 wrote:
mxaxai wrote:
Since this might get lost in the CivAv thread:
Boeing booked a big loss for the T-7A project in 1Q22. https://leehamnews.com/2022/04/27/boein ... ntil-2025/

The risks of a long term fixed-price contract


Has Boeing in the recent decades had any fixed price contracts that did'n't run over budget?


The issue occurs when development and production are included under the same contract terms. If the contract is cost-plus, the government suffers from risk of higher production costs. If the contract is fixed-cost, the vendor suffers from risk of higher development costs. So increasingly there is a focus on hybrid contract terms, that lean more toward cost sharing for development, and toward fixed-cost for production, once the risk has been retired.



Also the problem is the absolute crap under estimates that every defense contractor always provides. They give an estimated price, and almost always it’s an under bid. If the problem was uncertainty, then some estimate would be too high and other estimate would be too low. But that’s not what happens.
 
Avatar2go
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 9:16 am

kitplane01 wrote:

Also the problem is the absolute crap under estimates that every defense contractor always provides. They give an estimated price, and almost always it’s an under bid. If the problem was uncertainty, then some estimate would be too high and other estimate would be too low. But that’s not what happens.


While underbidding is definitely an issue, the reason the results skew to under rather than over bidding, is that the government tends to select the lowest bid.

Thus the projects that contain little risk tend to come in either on or on under cost, while the projects that contain risk are the ones that go over. Most projects are bid on the assumption that risks are understood. But turns out not to be the case, much of the time.

The advantage of the hybrid contract is that you don't assume you know the risks until you work through the development. Once retired, you can proceed to production at much lower cost.
 
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bikerthai
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 9:56 am

kitplane01 wrote:
Has Boeing in the recent decades had any fixed price contracts that did'n't run over budget?


The answer is yes. Contracts for mature production run like the P-8A, CH-47 and AH-64 made it through the COVID pandemic in the black.

Even the P-8A at the development stage had some delays which may have cause some charges.

bt
 
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flyingturtle
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 10:02 am

Avatar2go wrote:
kitplane01 wrote:

Also the problem is the absolute crap under estimates that every defense contractor always provides. They give an estimated price, and almost always it’s an under bid. If the problem was uncertainty, then some estimate would be too high and other estimate would be too low. But that’s not what happens.


While underbidding is definitely an issue, the reason the results skew to under rather than over bidding, is that the government tends to select the lowest bid.


In Swiss law, when a government authority places a contract, price isn't the main criterion. In the decision, price will have a weighting of 20 to 50%. Other factors are quality, the supplier's reputation, how quality and timely delivery will be assured... if the purchase is something very usual (e.g. construction material), the price's weighting is more like 50%. When something comes with a large degree of uncertainty (e.g. researching new technologies), it's 20% or in special cases, even 10%.
 
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bikerthai
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 10:17 am

The belief that companies expect to make massive profit on the back end of production run may be an myth.

As I understand, for the P-8A for latest lots, the per frame cost is expected to be lower than the prior lot. Not sure the in's and out's of the reason for this, but the expectation to make up profit by "overcharging" for later production run may no longer be wise.

bt
 
Avatar2go
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 10:36 am

flyingturtle wrote:

In Swiss law, when a government authority places a contract, price isn't the main criterion. In the decision, price will have a weighting of 20 to 50%. Other factors are quality, the supplier's reputation, how quality and timely delivery will be assured... if the purchase is something very usual (e.g. construction material), the price's weighting is more like 50%. When something comes with a large degree of uncertainty (e.g. researching new technologies), it's 20% or in special cases, even 10%.


Thanks for this, very interesting. Makes a lot of sense.
 
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kitplane01
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 5:29 pm

flyingturtle wrote:
Avatar2go wrote:
kitplane01 wrote:

Also the problem is the absolute crap under estimates that every defense contractor always provides. They give an estimated price, and almost always it’s an under bid. If the problem was uncertainty, then some estimate would be too high and other estimate would be too low. But that’s not what happens.


While underbidding is definitely an issue, the reason the results skew to under rather than over bidding, is that the government tends to select the lowest bid.


In Swiss law, when a government authority places a contract, price isn't the main criterion. In the decision, price will have a weighting of 20 to 50%. Other factors are quality, the supplier's reputation, how quality and timely delivery will be assured... if the purchase is something very usual (e.g. construction material), the price's weighting is more like 50%. When something comes with a large degree of uncertainty (e.g. researching new technologies), it's 20% or in special cases, even 10%.


OK. But that seems bad. I *want* the government to consider price .. and in many cases price seems very important. Lower taxes, more money for poor people or extra tanks, etc.

But if the contractor almost always underbids, and the government has to pay the excess .. that *ought* to go to supplier reputation.
 
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kitplane01
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 5:37 pm

Avatar2go wrote:
kitplane01 wrote:

Also the problem is the absolute crap under estimates that every defense contractor always provides. They give an estimated price, and almost always it’s an under bid. If the problem was uncertainty, then some estimate would be too high and other estimate would be too low. But that’s not what happens.


While underbidding is definitely an issue, the reason the results skew to under rather than over bidding, is that the government tends to select the lowest bid.


I agree. And the system as a whole produces almost-always-under-estimates, which are then believed as an accurate estimate. Which is stupid.

Avatar2go wrote:
Thus the projects that contain little risk tend to come in either on or on under cost, while the projects that contain risk are the ones that go over. Most projects are bid on the assumption that risks are understood. But turns out not to be the case, much of the time.


No. Risk means there is variability between the actual cost and the estimated cost. A good estimator will be above and below the actual cost in equal measure. Our system does not produce that ... it almost always produces underestimates (in part for the reason above). Our system has know, fixable flaws.

Avatar2go wrote:
The advantage of the hybrid contract is that you don't assume you know the risks until you work through the development. Once retired, you can proceed to production at much lower cost.


I don't think you wrote that right. I believe you mean "The advantage of the hybrid contract is that THE CONTRACTOR doesn't assume you know the risks until you work through the development." But the risk should be on the company that both (1) produced the estimate and (2) has more control over the costs. Companies that consistently underestimate will lose money, companies that consistently overbid will not get contracts, and companies that more often than their competitors get it right will make money. That sounds much better than the current system which rewards under-estimators.
 
JayinKitsap
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 6:44 pm

DOD sometime prior to the KC-46 bidding shifted the terms of the contract from more risk sharing in the development and production phase. Before many programs were basically true cost + a fixed margin for profit. The KC-46 RFP was a very much fixed price contract for both development and production, all of the risk on the Company, but the Company can factor that risk into the price, however, the worry is what is the competition doing. Adding a risk factor of 20% say might doom the bid if the competition uses 17%. The time period where the P-8A was bid had more risk sharing, but a dual direction, Boeing's costs are down on the P-8 so their pricing is also down.

Seen that in Construction contracts, a period of very fixed prices then a period of partnering and risk sharing. There are drawbacks to both types.

For the T-7A, things will be all right, once the plane is certified in this RFP, it is a very known entity for the next proposal, while the competition has a much larger challenge. Boeing can get back a big chunk then, pricing in say 70% of the competitions cost to certify.
 
Avatar2go
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 7:35 pm

kitplane01 wrote:

No. Risk means there is variability between the actual cost and the estimated cost. A good estimator will be above and below the actual cost in equal measure. Our system does not produce that ... it almost always produces underestimates (in part for the reason above). Our system has know, fixable flaws.

I don't think you wrote that right. I believe you mean "The advantage of the hybrid contract is that THE CONTRACTOR doesn't assume you know the risks until you work through the development." But the risk should be on the company that both (1) produced the estimate and (2) has more control over the costs. Companies that consistently underestimate will lose money, companies that consistently overbid will not get contracts, and companies that more often than their competitors get it right will make money. That sounds much better than the current system which rewards under-estimators.


Risk in this sense means uncertainty about the technology that no one has built yet. That has a direct bearing on development costs. Further contributing are changes to the specifications that may develop along the way, with learning on either side. Thus cost sharing is a better arrangement during development, whereas fixed price becomes more reasonable during production. Hence the hybrid contract.

The USAF acknowledged this directly in testimony before Congress on the KC-46. They are working on developing more suitable forms of contracts, that better address the risks, while also taking advantage of the retirement of risk that should occur before production.
 
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flyingturtle
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Re: T-7A Red Hawk News and Discussion Thread

Wed May 04, 2022 8:53 pm

kitplane01 wrote:

OK. But that seems bad. I *want* the government to consider price .. and in many cases price seems very important. Lower taxes, more money for poor people or extra tanks, etc.

But if the contractor almost always underbids, and the government has to pay the excess .. that *ought* to go to supplier reputation.


Yes, price is always considered. But here it's never the main factor. There are other stuff, like... is the technology we buy future-proof? How easily can the service life be extended? How easy can the system be maintained by other companies?

And one problem with underbidding - especially with civil engineering contracts, like building road tunnels - is that companies have more and more competent experts on hand. They will write a nice letter to the government, saying why they need more money to finish the project, and why it is not the fault of the contractor. Due to the pay grades, the best engineers rarely work with the government.

The federal government ordered a 53 kilometer railway tunnel, and it was delivered on time, and under budget. (But as the Mirage affair has shown, we also had some... err... crass mistakes with government contracts.)

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