Anyone for a Glass of Bathwater?
Aussie Digger said:
Occum,
Have a look at the Hansard transcript of 31 May 06, found here:
http://parlinfoweb.aph.gov.au/piweb/Repository/Commttee/Estimate/Linked/4738-3.PDF
The following points are of interest:
JSF flyaway cost has increased only 7% per platform ie: only $1.5m each extra at this stage.
Defence acknowledge this is a concern, but it has not yet gone past the "leeway" factored into the AIR-6000 budget.
Interesting points also made about C-17/C-130J/Caribou/Chinook/MRH-90 issues, Seasprites, Tigers and FFG-UP.
Cheers.
I agree. Not the best of Senate Estimates for Defence or the Senators, for that matter.
I expect there will be quite a few red faces in the department after this one.
See Adm Steve Enewold's latest statement (Defense News, 12 June 2006) on JSF costings - US$150m per on average through to ~ 2014.
http://aimpoints.hq.af.mil/display.cfm?id=11908
The Adm is in a difficult job as Program Director but even the attempt to soften the blow by putting forward the contractor's claims that the price will drop to around US$50m after 2014 gets gazzumped by the GOA, CBO and CRS reports to Congress.
See the latest CRS Report on the JSF. It states that the average unit procurement cost estimate, based upon the budgetary figures posted in December 2005, to be US$94.8 million per. Mind you, you could do this calculation yourself from the Selected Acquisition Report (SAR) of December 2005.
This is the same SAR that Air Commodore Harvey refers to in his testimony before the Senate Estimates Hearing. However, he seems to have overlooked the part that shows for 2,458 JSF aircraft, the total procurement budget is around US$233 Bn. Check the figuring and compare it to what the Congressional Research Services (CRS) reported to the US Congress.
By the way, the 7% that Harvs referred to is actually 7.7% and it was the net increase in the total program budget for the JSF for 2005, only. Not the increase in cost per platform as claimed or, for that matter, the increase in platform cost since start of the program, as implied. As for stating the 7.7% as opposed to the rounded down 7% - the 0.7% of US$256 billion is a bucket load of change, by any measure.
Seems when some folks start talking in the millions and the billions that there is a dollar sign attached to this and if one understands the value of a dollar, then the number of zeros to the right of the number does not diminish this but rather increases it by an order of magnitude for every zero.
There's a lot of smoke and mirrors being employed by some people and drinking of their own bath water on this issue of JSF costs. Pity that, since there have been some excellent technological developments achieved, so far, but it will be the program that suffers once people realise they have been misled. Affordability indeed!
FYI, the latest Procurement Budget Estimate for the JSF Program that I have seen is about US$247 Bn. This is due to the roll backs on the 2nd engine (not including the RDT&E cost estimates) and removal of some of the smoke and mirrors identified by those who check for such things and use magenta pens. This figure puts the average unit procurement cost over US$100 million per.
This is an average and as the good Air Commodore says, if you buy early in the program, you pay more. Buy quite early in the program, like 2012, and you pay a lot more.
I know where I would be putting the money.
