If Australia commits to the JSF as the current Defence plans propose, the average unit procurement cost (the amount to be paid) for a 100 aircraft buy over the period 2014 to 2018 will likely be well over US$110 million per aircraft (not including in-country Australia infrastructure and set up costs).
The first operational squadron (~24 units) of RAAF F-35As is planned to be purchased from Low Rate Initial Protection (LRIP) 5 (2013), the other two squadrons (~48) in the Air 6000 Phases 2A/2B will come later, presumably post LRIP in full-rate production. If Australia can negotiate a Multi Year Procurement (MYP) as is the expressed intent then we can hopefully achieve lower cost by averaging.
So it’s not simply a matter of deducing Unit Procurement Cost (UPC) from LRIP and saying that is the average cost of the RAAF per unit buy, the so-called analysis behind Air Power Australia aka Occum. Our actual UPC for F-35 will be on average across the ~72 strong buy much lower. Defence is saying post the latest US DoD number crunching an average Unit Flyaway Cost (UFC) of at the most USD 47 million in base year dollars (2002) that equates to in rough 2015ish then year dollar terms of USD 65 million (using an average 2.5% inflation per annum). UPC is obviously higher.
If we were to acquire the F-22 in the F-35s place we would also have to pay for at least the following to make the capability available and bring it up to the minimum RAAF required multi-role capability:
Cost of US export release >USD 1 billion, according to US Defence Security Cooperation Agency (DSCA) with others saying as high as USD 1.8 billion
Cost of providing capability shortfall in maritime strike, stand off strike, EO targeting/recce, >1,000lb effect strike. At least:
Acquisition and Integration of EOTS (>USD 150 million)
Integration of JSOW (>USD 50 million)
Integration of JASSM (>USD 50 million)
So that’s an additional USD 1.25 billion, which averaged across a 72 unit Air 6000 Phase 2A/2B buy would equate to another >USD 17 million – at least! (more likely to be double that) – per UFC/UPC for an Aussie F-22A.
Then of course all of this money would be spent in the US without any defrayal to Australia via Australian industry involvement. Cost of F-35 acquisition is defrayed in overall government terms by the spend in Australia on Australian components for the F-35 program, which are supposedly meant to equal our overall buy. While it may not appear in the Defence end of the ledger things like Australian jobs, taxes to the Commonwealth and the current account deficit are significant elements of overall financial planning. Without these defrayals one needs to factor in far higher cost to the nation for each of the F-22 dollars spent.
Of course UFC/UPC isn’t the only cost of acquisition. For the F-35s Australia has had to pay our 1% stake of the development phases we have been signed up to. Since we have already paid this money it would be included in any total Air 6000 cost if we changed horse to F-22. Though this is only a few hundred million. Plus we need to acquire a sustainment system and pay for ongoing Through Life Support and training costs.
This is the real killer in the raise and sustain costs of the F-22. For which Australia would have to pay 30% of the entire system costs shared with USAF (72 RAAF F-22s and 183 USAF F-22s). Our stake of the current numbers planned for F-35 is only 2% of the entire global raise and sustain system.
The ‘rose glasses’ viewpoint of Air Power Australia (aka Occum) gives the best possible but fanciful interpretation for the F-22 and the worst possible for F-35. No wonder their figures consistently back up their viewpoint? Overall cost to the nation of Australia of acquiring the F-22 over the F-35 will be significantly higher and has been modelled by defence in far higher complexity than the simplistic best case UCP versus worst case UCP offered by APA.
