Will latest F-35 problems push Norway towards a European solution?
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The calculation method above would be sensitive to a change in the ratios of A, B, & C, of course, but luckily they haven't changed recently.
Got the numbers here. Based on the September 2007 SAR. Year is price basis. F-35C is similar price to F-35B.
Estimated flyaway cost
F-35A $57.8 mn 2007
F-35B $73.7 mn 2007
PUAC = including all costs including fixed (therefore sensitive to numbers bought), APUC = excluding fixed costs, but including all variable procurement costs.
2007$
Total $244560.1 mn
PUAC $99.5 mn
APUC $85.1 mn
Then-year $
PUAC $122.0 mn
APUC $104.4 mn
Total $299824.1 mn
2002$
PUAC $85.2 mn
APUC $72.9 mn
Total $209401.6 mn
Gottit - and agree entirely.
Hello Grand Danois, and thanks for the answer.
The USAF budget comprises just the F-35A fleet, the costs for the "B" and "C" versions are on the US Navy Budget which is also public.
The numbers that i´ve mentioned are ONLY for the USAF version.
Being my first post here i couldn´t introduce links, so i made a small trick, under each photobucket entry there´s an URL without the first "H"...
So on your browser put an "H" in this:
(H)ttp://www.saffm.hq.af.mil/shared/media/document/AFD-080204-081.pdf
You will find part of the 2009 USAF Budget, from page 43 on there´s the actual costs of the 1763 F-35A, and only the "A" version. And if you see the 2008, and specially the 2007 budget you will find out that there´s a HUGE "Unit Fly Away Cost" escalation.
Read carefully the document; without the LRIP units, the "Unit Fly Away Cost" goes to 79.973 million US$ (page43), and the 83 million US$ his without the Non Recurring Costs (Pag44). Including the Non Recurring Cost the number goes up to 90.314 million US$ and it´s called "Wpn Sys Unit Cost" (page 43 and 44).
2008 Budget
(H)ttp//www.saffm.hq.af.mil/shared/media/document/AFD-070212-004.pdf
2007 Budget
(H)ttp://www.saffm.hq.af.mil/shared/media/document/AFD-070214-050.pdf
The 47/50 million US$ "Unit Fly Away Cost" estimated by Lockheed Martin was crossed years ago, to be precise in 2005, that´s when i saw the first LM power point presentation with that number. It seem´s that somehow they have never noticed that the costs were going up!
So, why does the USAF present an "Unit Fly Away Cost" of 83 million US$ and Lockheed Martin a substantially lower number to the foreign "buyers/partners"?
Bill Sweetman answered that one in AW blog ARES:
(h)ttp://www.aviationweek.com/aw/blogs/de ... a4496c7e91
Believe it or not (i was dumbstruck when i figure it out) LM commercials have been giving unrealistic "UFAC" to foreign partners and to the Press. They have been doing the same to the Pentagon for years (F-22, LCS, etc, etc, etc).
Remember that 2006 radio interview in Norway to USAF Colonel Richard Harris about JSF?
In that interview he quoted “The fly-away cost of the plane is $47M per plane.”, a few day´s before Tom Burbage was quoting a much higher figure for the F-35A, 56 millions US$.
Actually if we make a time chart with declarations of Lock Mart officials about the JSF cost it´s downright scary.
(h)ttp://www.freerepublic.com/focus/f-news/1625537/posts
About the numbers of f-35A procured by year for the USAF, ANNEX A (APRIL 2007 REVISION)
ESTIMATED JSF AIR VEHICLE PROCUREMENT QUANTITIES (taken from jsf.mil) only gives the entire production for the three versions "A/B/C", and is outdated. By middle 2007 (i think it was in august, not sure on that one) the US Congress blocked the production of the F-35A for the USAF to 48 units a year from a previous objective of 110 units/year.
Every document from the last six months coming from the USAF confirms that number.
(h)ttp://www.airforcetimes.com/news/2008/04/airforce_fighter_gap_040908w/
And look again to ANNEX A (APRIL 2007 REVISION)
ESTIMATED JSF AIR VEHICLE PROCUREMENT QUANTITIES. That´s from April 2007, a year ago, look really hard to the delivery date for the first units to Holand and Great Britain, in the document it´s 2009, one year after and in the real world the first delivery has been postponed to 2011…
(h)ttp://www.flightglobal.com/articles/2008/03/12/222123/netherlands-decides-to-join-jsf-evaluation-team.html
Bottom line, the 83 millions US$ his the USAF official “Unit Fly Away Cost” for the F-35A, without the Non Recurring Costs, and Lockheed Martin his proihibited by law off selling military hardware at lower costs to foreign powers. So, we have a problem here! And Saab has a very valid point.
I can be wrong on this one but it´s going to be a bloody HUGE shock to the eight foreign partners when the actual bill his delivered…
You can find the US Army, Navy and Air Force Budgets in here:
(h)ttp://www.saffm.hq.af.mil/budget/
Cheers
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ThanksHi Sintra
Welcome and thank you for an informative post backed up with links
I have been following this story for a few years by now.
Cheers
Hi Sintra, and once again thanks for providing source that support your claims, its most refreshing and enlightning.
It really only leaves me with one question:
surely the first thing you want to know when you buy something is how much its gonna cost ya!
It really only leaves me with one question:
Well whats the point in a request for info if it doesnt include a binding price agreement ?Sintra said:
surely the first thing you want to know when you buy something is how much its gonna cost ya!
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Well, thats how it works, you assess an offered capability against the requirement. Pricing does not enter into any procurement process unless its against a formal Tendered requirement.
There is a vast difference between a RFI and a full system submission against an RFT
RFI's don't necessarily request pricing. They're designed to get a capability assessment against the requirement from potential vendors.
If it was about pricing, then it would be a full blown Tender Definition - and that invites other legal requirements etc...
RFI's are routinely run that do NOT lead to formal Tender submissions.
So bottom line is they will never ask how much it cost.
Then the first question is, what year will they get the bill ? is at least that in the contract ?
2nd question: If Norway sign a contract based on RFI, whoever gets the contract can charge ex. 2 billion a piece,
-then the only way for Norway to get out of the trap is by paying a fine that was made up in the contract right ?
Actually, is it made up in the info of understanding what is first to be transferred, planes or money ?
This aint how a man in pattaya with a life expectancy of over one year would do business
Then the first question is, what year will they get the bill ? is at least that in the contract ?
2nd question: If Norway sign a contract based on RFI, whoever gets the contract can charge ex. 2 billion a piece,
-then the only way for Norway to get out of the trap is by paying a fine that was made up in the contract right ?
Actually, is it made up in the info of understanding what is first to be transferred, planes or money ?
This aint how a man in pattaya with a life expectancy of over one year would do business
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RFI's are not Tender submissions, they are about requesting information about meeting a capability requirement.
RFI's are at the vendors cost - sometimes they will cost millions (some have cost in excess of $10 million). The vendors will determine how much info, detail, quality and hence absorbed cost they are prepared to spend to get interest. It's a commercial risk - and its common practice.
No. If Norway was interested in pursuing the detail of the RFI they would have a number of options. (typically - and dependant on local legislation)
1) Accept a sole source submission with pricing attached based on the responses received
2) Submit an RFT based on the fact that the quality of submissions warranted an open Tender competition
RFI's are typically at vendors expense and are not recoverable except via Tax etc.... Its normal commercial risk that is used across a number of countries. India as an example tends to like RFI, as does China
Some vendors do not submit to RFI as they see it as a non binding process that may also not result in open competition.
an RFI is not an RFT. The quality of submission is not as detailed as it usually does not factor in issues such as through life costs etc....
Grand Danois
Entertainer
because the USAF UFC is not relevant for partner buys, particularly when the UFC includes unrelated nonrecurring costs not normally included in an UFC.
partner nations will use something that is conceptually close to UPC, *not* UFC. An UPC you could then itemize into UFC, with and without nonrecurring cost, ancillery equip., documentation, whatnot.
UFC are typically used on public forums, because they represent the cost of a barebone jet. Hence you have to factor out the nonrecurring costs, as they are hard to disseminate or normalize and compare.
Weapon sys unit cost would be reasonably representative of the UPC that the partners will dole out.
Yes, to the USAF... but this UFC does not represent the UFC to the partner nations.
No, with nonrecurring costs, see exhibit p-5: http://www.saffm.hq.af.mil/shared/media/document/AFD-080204-081.pdf
The nonrecurring cost constitute 24% of the UFC of the 2009 batch. Same exhibit shows the recurring fly away to be 150 mn usd (and not 199 mn usd as it reads on exhibit p-40, as that number include nonrecurring costs
)To be crude... if i cut the 25% nonrecurring part of the UFC off a later batch at less than 80 mn usd a piece - then the recurring UFC becomes less than 60 mn usd... getting to the 50 mn - fast.
And they won't. Because the USAF UFC is a very unique not directly comparable item, which works under USAF accounting practices. It is *not* relevant to foreign air forces.
Btw, partner nations don't buy their jets through the FMS program.
Well.... the USAF UFC is not the price tag for the partner nations; it seems the partner nations are confident in the project.
No one is being cheated.
Note that when i have used fly away costs earlier, then they are bare-bone costs - including for the Gripen.
i'll get back to the other points later. (A/B/C and 48 jets/yr)
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Surely, one of the main reasons why the 2009 price is so high is that it includes costs specific to the LRIP aircraft? And wouldn't it be reasonable to assume that these "non-recurring flyaway" costs are exactly that, LRIP-specific, & that part of the expected reduction in unit price is due to it getting down to a real "flyaway" cost, without non-recurring costs?No, with nonrecurring costs, see exhibit p-5: http://www.saffm.hq.af.mil/shared/media/document/AFD-080204-081.pdf
The nonrecurring cost constitute 24% of the UFC of the 2009 batch. Same exhibit shows the recurring fly away to be 150 mn usd (and not 199 mn usd as it reads on exhibit p-40, as that number include nonrecurring costs
To be crude... if i cut the 25% nonrecurring part of the UFC off a later batch at less than 80 mn usd a piece - then the recurring UFC becomes less than 60 mn usd... getting to the 50 mn - fast.
...
Grand Danois
Entertainer
Yes. It was caveated as a "crude" example.
However, 24% in non-recurring costs doesn't seem that much, particularly if one takes into consideration that the UFC drops from 199 mn usd in 2009 to 91 mn usd in 2013. So though I would expect the NRC to drop more relative to the UFC, it won't go away.
Btw, noted that wpn sys unit cost plus initial spares arrive at 97.4 mn usd over the entire program. This should be very close to an AUPC, which would normally include initial spares and services for the first two-three years. This AUPC include the cost of LRIPs. Post 2014 the "AUPC" is 93.6 mn usd, meaning that Norway could get 48 F-35A for 4.5 bn usd.
The Gripen offer for Denmark was for 48 Gripen plus 20 years of spares and support for 3 bn eur (4.7 bn usd, but exchange rates are not representative at the moment).
Thailand will pay 1.1 bn usd for 12 Gripen plus 2 Erieeyes with a two years maintenance and spare parts support package.
Wonder what an Erieeye comes in at... ?
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Grand Danois
Entertainer
Hi Sintra,
Was a bit puzzled that the US Congress had capped the procurement quantities of the F-35A at 48. I remember there was some rumblings about it, but not that it had actually materialized.
I may suffer from poor Googling skills, but the only source I can find is the link you posted from Airforcetimes, part of the privately owned militarytimes network. Their sites feature rehashes of that same article.
But nothing official.
So I looked for the testimony given at the hearing April 9, which the articles refer to. Nothing clear-cut in it, but there was little snippet:
Capitalization of our fifth generation fighter force is essential to meet our commitment of securing the national defense. F-35s will not achieve full production rates until 2015 yet we are already retiring F-15s and F-16s, and will continue to do so well into the out-years. During this period of retiring aircraft before F-35 full rate production, F-22 production is capped, effectively interrupting our ability for fifth generation recapitalization until the middle of the next decade.
PRESENTATION TO THE SENATE ARMED SERVICES COMMITTEE
AIRLAND SUBCOMMITTEE
UNITED STATES SENATE
This is consistent with the procurement schedule, which will hit full production of 130 in 2015.
http://www.jsf.mil/downloads/documents/ANNEX A Revision_April 2007.pdf
I further note that the procurement schedule is consistent with quantities up to 2013 in the FY 2009 budget estimates.
http://www.saffm.hq.af.mil/shared/media/document/AFD-080204-081.pdf
Most significantly in both, F-35 procurement quantities will hit 48 in 2013. However, according to above quote, full-rate production will begin in 2015. So 48 doesn't seem like full-rate production.
Having read the testimony, my thoughts are that this is about getting money for additional Raptors until F-35 production kicks in. Washington budgetary battles.
Cheers
That includes a ground environment, which is a substantial part of the cost of the AEW package.
If no F-22s are ordered this year, as planned by the Pentagon, there won't be a production line. Many of Lockheed's employees will be laid off. The F-22 backers just don't understand, this year's Congress is the same Congress as last year, both houses held by Democrats.
F-15 Eagle
New Member
And this is what will cause a fighter gap of 800 or more aircraft between 2017 and 2024. So the USAF is now doing a study to see how many F-15s and F-16s they are going to keep until the F-35 can replace them.
As for the Democrats in Congress, people don't realize that their the ones who want more F-22 orders. Its the pentagon with Robert Gates and Gordon England who are the ones that want to cap F-22 production at only 183 fighters. The Democrats and Republicans in Congress along with the USAF have tried to convince the Pentagon to allow more F-22 orders but the Pentagon just says a stuborn no without even looking into the possibility.:coffee
I don't know why the Democrats have the sterotype of being weak on defense even though they have in fact voted to increase defense spending and put more funding into the defense budget then what President Bush has asked for.
As for the Democrats in Congress, people don't realize that their the ones who want more F-22 orders. Its the pentagon with Robert Gates and Gordon England who are the ones that want to cap F-22 production at only 183 fighters. The Democrats and Republicans in Congress along with the USAF have tried to convince the Pentagon to allow more F-22 orders but the Pentagon just says a stuborn no without even looking into the possibility.:coffee
I don't know why the Democrats have the sterotype of being weak on defense even though they have in fact voted to increase defense spending and put more funding into the defense budget then what President Bush has asked for.
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