Pentagon Updates F-35 Cost Estimates, Schedule

 - April 13, 2012, 2:25 PM
The latest cost estimates for the F-35 have been released, as well as details of new schedule delays. (Photo: Lockheed Martin)

The latest Selected Acquisition Report on the Lockheed Martin F-35 program has updated the Pentagon’s cost estimates. The eight international partners may take some comfort from the predictions of future unit recurring flyaway costs, once full-rate production begins. That is, if they defer the majority of their buys until then, which seems increasingly likely. The report also details the schedule delays that were officially approved last December.

System Design and Development is listed as RDT&E in the report. The report lists this cost as nearly $48 billion for the airframe in 2012 dollars, compared with the $32.5 billion estimated when system design and development began in October 2001. The cost of engine development has increased from $6.5 billion to $11.7 billion, again in constant 2012 dollars. The SDD phase is apparently not now due to end until 2019, with the completion of initial test and operation in February of that year. The Block 3F software that is required for meaningful combat capability is now predicted to be available in August 2017.

The three U.S. services have again delayed the initial operating capability dates of their respective F-35s, and revised dates won’t be set until next year. They were previously December this year for the U.S. Marine Corps F-35B and April 2016 for the U.S. Air Force and U.S. Navy. Full-rate production, meaning an annual rate of 60 F-35As for the U.S. Air Force and 50 F-35B/Cs for the Marine Corps and Navy, is now due to begin in 2018.

The average unit recurring flyaway cost (URFC) is given as $78.7 million for the F-35A, $106.5 million for the F-35B, and $87 million for the F-35C, in 2012 dollars. But this assumes an unchanged ultimate U.S. Air Force procurement of 1,763 F-35As and 680 F-35B/Cs, plus an international partner buy of 697 aircraft plus 19 for Israel. The URFC does not include the cost of initial training, spares and support. However, AIN believes that it is a more useful measure than the average procurement unit cost (APUC), which is also quoted in the report, since this amortizes a number of other costs. Also, the average URFC figures mask the substantially higher URFCs of the low-rate initial production (LRIP) aircraft. For example, the LRIP F-35As are costing between $100 and $125 million, and the 19 for Israel are quoted at $144.7 million in this report.

There has been much discussion of the grand total of $1.5 trillion the report gives for development, acquisition and operation of the F-35. This estimate is predicated on a support structure that is not yet defined, plus fuel costs and inflation over 55 years. Lockheed Martin commented that such an exercise had never previously been attempted, and that “a number of variables are subject to considerable fluctuation…making the estimate inherently imprecise.” The company expressed continued confidence that F-35 operations and support costs will be comparable or lower than those of the seven aircraft types it replaces.

Comments

Geoff Koh's picture

"...AIN believes that it [URFC] is a more useful measure than the average procurement unit cost (APUC), which is also quoted in the report, since this amortizes development and a number of other costs."

Actually, the 'APUC' does NOT amortize 'development' as a part of the estimated Procurement unit cost being quoted.

APUC simply includes all the required Procurement costs (recurring and non-recurring and ancillary + essential basic support, equipment + initial spares) to 'acquire' and deliver the jet in operating status to the customer.

Thus it's truly the PUC cost which is actually even more important to examine and evaluate by the potential customer than the most basic 'URF' cost portion of the total Procurement cost.

The PUC reveals to the customer what the FULL cost is to be expected, if to acquire each unit of the jet. It shows how efficient the jet is to acquire in totality as a platform, including all the required and essential basic equipment and support to buy it. Generally, the more original, complex, stealthy and more high-tech the platform is, the more the 'other' cost portions associated with procuring a jet (ie other than simple URF) will end up costing the customer.

And lastly, it is important to emphasize as the article above reports, that even these latest 'estimates' will very unfortunately change once again as it becomes evident that USAF, USN and Partner orders will be substantially reduced under FRP rates and reduced in the total number of buys compared to very high and unsustainable original expectations.

Chris Pocock's picture

Mr. Koh is correct. I confused the APUC (Average Procurement Unit Cost) with the PAUC (Program Acquisition Unit Cost) which does amortize the development cost.

I have corrected the text, and also amended the second paragraph to make clear that this solely refers to the development cost.

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