Boeing and Textron Try to Prevent Osprey from Going the Way of the Dodo

By ANDRE FRANCISCO

A new multi-year contract for 122 V-22 Ospreys has been submitted to the Navy for consideration by Boeing and Textron. The contract would renew the current deal for five more years at a cost of $8 billion, according to Bloomberg.

The current contract is on time and under budget, but you may remember that POGO and others have raised a number of concerns about the Osprey, including questions about its safety, cost and how thoroughly the Pentagon tested the aircraft.

As part of our blueprint to reduce the deficit, POGO and Taxpayers for Common Sense recommended declining to renew the V-22 program. In our report, we recommended that the program not be renewed because it was not cost effective and the V-22s could be replaced by MH-60 or Ch-53 helicopters. “According to the Government Accountability Office (GAO), the V-22 costs over $11,000 per hour to fly and had a full mission capability (FMC) rate of just 6 percent in Iraq,” the report said.

The current $10.9 billion contract for 174 Ospreys has each aircraft costing about $62.6 million, but the new proposed contract puts the cost at $65 million each, according to the Bloomberg article. Shouldn’t the cost of building V-22s go down over time as experience and the economies of scale kick in? Why the $2.4 million increase for each aircraft?

Some people have offered their support of the Osprey. A Defense Daily article about the new proposal said “the MV-22 has had the lowest Class A mishap rate of any tactical rotorcraft in the Marine Corps during the past decade. Fiscal year 2010 Navy flight-hour cost data also show that the Osprey has the lowest cost per seat-mile, or the cost to transport one person over a distance of one mile, of any U.S. naval transport rotorcraft,” according to the Naval Safety Center.

But at the same time, a number of reports have questioned the safety and cost problems of the Osprey. In January, we wrote about a National Journal article that summarized four separate, independent reviews of Pentagon spending that all included cutting the V-22 program as part of a larger program of spending reduction.

As the Bloomberg article said, “Signing a multi-year contract also virtually guarantees those aircraft can’t be canceled because the military would face steep termination costs.”

We are sticking with our recommendation from the blueprint for debt reduction—don’t renew the procurement contract. We need the money elsewhere, and we don’t need the risks of the V-22.

Andre Francisco is a POGO communications associate.

Follow @andrefrancisco

Photo via the Navy.

Comments

[Dagpotter]

The previous contract was for over 170 of the V-22 and the current one being negotiated is for only 122. So there is a chance that the price might increase due to just the quantity difference. Anyway the value of the contract has yet to be negotiated or announced so any discussion of the price is just speculative.

[Dfens]

If your idea was to stir up the V-22 program schill some more with yet another article exposing this vehicle for the failure it is, then I've got to say, I'm with you. Did you notice the quad-tilt-rotor design in the Transformers 3 movie? Quad-rotors! Finally we're skipping past the failed designs of the 1950's and moving on to the successes of the 1960's. If they'd step up to the ducted fans, they'd finally be caught up to the X-22 of '66. No more of those twin rotor unique ring vortex states to contend with, and, if they use the ducted fans, they can actually land the craft like an airplane.

The V-22 was the expensive way to relearn the fact that small rotors don't auto-rotate, but then in was an expensive lesson in the failures of the past all around, really. Hard to believe Bell could be so successful at VTOL in the past and suck at it so badly today, but, when it comes right down to it, people design aircraft, not companies. Good people design good aircraft. Too bad the people who suck can't all work on V-22 so we could cut them out like a cancer.

Even if the future of VTOL does become some of the more successful designs of the past, we still have the procurement problem to deal with. Regardless of wether the basic design is good or bad, as long as we pay contractors more to fail than we do if they succeed, we'll still have to pay too much for development, and the cost of the vehicles developed will be too high. You get what you pay for, and as long as you pay more for failure, that's what you're going to get. It's not rocket science!

And as an additional bonus, if we start buying vehicles on their merits and not just because of the size of procurement cheering section (bureacracy) that's been built up around them, we will see a marked reduction in the need for program schills that pollute the internet with their political correctness.

[Ofens]

Nice argument there, Andre. Did you even read the Bloomberg article?

You took their ESTIMATED $8 billion value, then back-calculated the unit cost to be $65 million. There was no contract value stated, this was a guess by Bloomberg based upon the old V22 cost! It says that right in the article!

"At the current basic “flyaway” cost of $65 million apiece, the new contract could approach $8 billion."

So then the fact that they "rounded up" with their guess makes you write a piece decrying the increased price of $2.4 million each....when there are absolutely no actual numbers discussed anywhere? You then go on to argue that this "increase" in cost is yet another reason to sink the multi year. Stellar journalism, there.

"The Department of the Navy, the buying agent for the V-22, had requested a multi-year contract proposal in order to help justify to DoD a new five-year contract rather than year-to-year purchases. The Navy must show that a multi-year contract will produce cost savings of at least 10 percent."

So this little fact would lead one to believe that the ACTUAL contract price MUST be lower than previous, in order for a multi-year contract to even be considered.

Also, I am completely confounded as to how you can mention sources showing the V22 has the lowest cost and best safety in inventory, and then counter that point with an assertion regarding "a number of reports" that state otherwise which you fail to detail or link whatsoever (either because they dont actually exist or are so old and outdated you know they are no longer even relevent). Once again outstanding journalism and objectivity on your part.