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Feb 15, 2011

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TC

Aviation Weekly on December 16, 2010 did an article on F-35 “target prices.” Bottom line is that prices for these things are all over the place.

According to the Joint Program Office (JPO), the recently signed LRIP 4 contract (LRIP 4 is the first “fixed-price” incentive contract for the F-35) sets target prices as follows:
• F-35A (CTOL) $111.6 million
• F-35B (STOVL) $109.4 million
• F-35C (carrier) $142.9 million

These prices did not include the F135 engine, as Pratt & Whitney is still negotiating its LRIP 4 contract.

LRIP 3 price at around $19 million for the CTOL engine and $38 million for the STOVL engine including Rolls-Royce lift system. Pratt offered a price reduction of at least 10% for LRIP 4 and has likely been pushed lower as it has also gone to a fixed-price contract.

But here is the real kicker. The “fixed-price” contract is not really a fixed price contract. This is where it gets fun.

Under the terms of the LRIP 4 contract, Lockheed and the Pentagon will share any costs above the target price 50:50, with a ceiling on what the government would have to pay of 120%. So a:
• F-35A ($111.6M) could cost the DoD up to $133.9 million (additional $22.3M)
• F-35B ($109.4M) up to $131.3 million (additional $21.9M)

(Again, that excludes engines). Beyond that Lockheed carries the cost.

Rest assured, as the R&D gets dragged out even more and more and more countries decide these costs are unaffordable (as any common sense, fiscally responsible nation will do), the unit costs to the American taxpayer will sky rocket. Then, when the program looks like it is really in trouble, we will all hear the magic words…

“But we already have all these sunk costs”

Bottom line is Lockheed doesn’t care. This is their business model. They will have made a ton of money off of the $40B + R&D phase (like they did with the Presidential helicopter) and enough senior military and DOD civilian retirees will be employed (or promised employment) that the gold will keep rolling in. Of course, then we will get to the fun part which will be all the added money Lockheed will get paid to fix the aircraft so that they can do what they were supposed to do in the first. Don’t forget. This is the company that sold a “commercial-off-the-shelf C-130J that was going to cost the same as the C-130 it would replace (somewhere between $30-$40M) that so far has cost the American taxpayer over $90M per aircraft to fix so they can actually be deployed for combat.

When will all this silliness stop?

Gene

The JSF-35, like the F-22, is yet another expensive aircraft that the services do not need. We've lost about two fixed-wing aircraft due to hostile fire in the last ten years. When was the last time an infantryman got killed? Was it today or yesterday? My point is that the casualties are vastly disproportionate. If we're going to spend the money, do it to better protect the people on the ground, not in the air where even with our existing technologies we are far, far superior to our opponents, and will remain so for decades to come.

Brian Todd

This assessment of the Joint Strike Fighter is completely misguided. New technologies cost money, and no price can be placed on maintaining our national security in an increasingly dangerous world.

The F-35C will replace the AV-8B Harriers our Marine pilots now fly, many of which are 20-30+ years old and depend on inadequate, obsolete technology. The STOVAL-capable F-35C Lightning II is absolutely critical to the Marine Corps' expeditionary mission both now and in the future.

tedbohne

one need only look up operation "pacific vision" for answers to these two edsels.

GhostOf666

"We would be better off if the Department of Defense funded 2 or 3 companies to develop aircraft all the way to production. At least then there would be some competition to drive down development costs and schedule slides."

That was going to be exactly my comment!
Thanks DFENS!
Think anybody in Congress/Administration will get the message?

Dfens

Here's the email that was forwarded to me after the F-22 was finally declared operational at the very end of 2007:

From: ACC/CC Commander Sent: Thursday, November 08, 2007 7:48 PM To: Wynne Michael Honorable SAF/OS; Moseley Michael Gen AF/CC Cc: Clary David E MajGen ACC/CV; McKinley Craig R Lt Gen NGB/CF; 9 AF/CC Commander ; ACC/A3 Director of Air and Space Operations; ACC/A4 Director of Logistics; ACC/A5 Director of Plans and Programs; ACC/A8 Director of Requirements; 192 FW CCAIR Air Commanders; ACC/DS Director Of Staff; ACC/DSAA Correspondence; ACC/CCX Commanders Action Group; ACC/HO Command Historian; ACC/PA Director of Public Affairs; AFPEO F-22 Program; 1 FW/CC Commander; Hansen Mark L LtCol ACC/A3OH; ACC/CV Vice Commander Subject: F-22A FOC Declaration

MEMORANDUM FOR CSAF
SAF/OS

SUBJECT: F-22A FOC Declaration

1. Mr. Secretary and Chief, I am honored to announce that after 25 years of collaborative effort, a key milestone for the F-22A is behind us. The integrated 1FW/192FW at Langley possesses sufficient Raptors, equipment and trained Airmen to provide Air Dominance for the Joint Force for many years to come. The Raptor is ready for global CFACC tasking ahead of schedule and I declare Full Operational Capability for the F-22A as of 12 December 07.

2. Our success at Langley is the showcase example of our shared vision for the Total Force Integration of tomorrow. 1FW Active duty and 192FW Virginia guard Airmen fly and maintain the world's premier 5th generation fighter with seamless integration, superior dedication and unmatched synergy. Team Langley represents the type of readiness and organization we need to maintain a dominant Joint Total Force for the future.

//Signed//
JOHN D.W. CORLEY
General, USAF
Commander

Apparently those in charge of the USAF think 25 years is a scortchingly fast development time. These guys are obviously patting each other on the back for such a huge achievment. It is also obvious that any real reform of the way we procure weapons is not going to come from this bunch of butt kissing morons!

Glen B Alleman

Are we comparing comparable capabilities here? Cost are different, what are the differences in mission capability for those costs?

Dfens

We would be better off if the Department of Defense funded 2 or 3 companies to develop aircraft all the way to production. At least then there would be some competition to drive down development costs and schedule slides. If we continue on the road we are on, out defense costs will continue to cost more than they did during the Cold War, and the schedules will continue to slide out from the current 2 to 3 decades. That's just insane. Yet even given the fact that these defense contractors continue to pull down record profits, we don't do anything to change the system. We use the same failed approach time after time, each time hoping for a better result. Instead, each time we get a worse result, and still we don't change a damn thing.

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