Farnborough Air Show

F-35 Flyaway Cost Targeted at $85 Million

 - July 12, 2016, 4:00 PM

The new target price for volume production of the F-35A is $85 million, program officials confirmed here yesterday. They announced an extension of a joint government/industry initiative to reduce production costs, named the Blueprint For Affordability. A second initiative targeting cost reductions in support and sustainment was also described.

Frank Kendall, U.S. Under Secretary of Defense for Acquisition, Technology and Logistics, scotched rumors that the long-awaited deal for Lots 9 and 10 of the Lightning II stealth fighter would be sealed here this week. But it is already known that the unit recurring flyaway cost (URFC) for an F-35A in those contracts is about $100 million. The $85 million URFC would apply starting in 2019. The F-35B STOVL and F-35C carrier versions cost considerably more.

“I have for some time not considered the F-35 to be one of my problem programs,” Kendall said. He admitted that the System Design and Development (SDD) program had gone way over budget, but not since the ‘re-baselining’ of the program in 2010. The F-35 SDD ends next year with final revisions to the Block 3F software; finishing of the structural testing; and final weapons qualifications.

In any case, Kendall added, development costs are only 10 percent of the life-cycle costs of any defense program. He is calling for a 30 percent reduction in F-35 operations and support costs. The Sustainment Cost Reduction Initiative announced here yesterday aims for 10 percent, or $1 billion, over Fiscal Years 2018-2022.

Like the Blueprint for Affordability, industry will recoup its investment and fee once the accrued savings are verified. Lockheed Martin (Chalet D10) president and CEO Marillyn Hewson said that her company, together with Northrop Grumman and BAE Systems (Outdoor Exhibit 11), will invest $250 million in initiatives, such as a spare parts block buy, and regional hubs for the F-35’s Autonomous Logistics Information System (ALIS).

Lt. Gen. Christopher Bogdan, head of the Pentagon’s F-35 Joint Program Office (JPO), said that the 3F software was “twice as good” as the 2B and 3i software that is on most of the aircraft already delivered. He said that the JPO was currently assessing bids received for F-35 avionics repair services, with first selections to be made in November. The JPO previously nominated overhaul depots by region for the airframe and engine. But contrary to earlier impressions, Bogdan said that these nominations were not definitive. “We’re always looking for best value, and we’ll invest elsewhere to achieve efficiency,” he said. o