Joint Strike Fighter Total Cost Still Up in the Air
But the Pentagon inspector general recently published a report that was familiar to those who have followed the long saga of designing and building a fifth-generation fighter. Juxtaposing the optimistic rhetoric from Lockheed and Lt. Gen. Christopher Bogdan, F-35 program executive officer, the IG found hundreds of incidents of mismanagement and lax oversight by the government that underscore continued ambiguity over how much more money the jet will consume.
No one can agree on how much the jet will have cost U.S. taxpayers — not to mention a coalition of international partners — after the F-35 enters service. Bogdan’s office insists the price over the 50-year lifecycle of the aircraft sits at $857 billion and is slowly falling as cost is driven from all aspects of development, operation and sustainment.
Bogdan said there is “no more time and no more money” for developmental delays of the jets. Everyone involved must make cost-reduction a priority or sacrifice future capabilities to pay the bills.
“By 2019, I’m looking for a fifth-generation airplane for a fourth-generation price,” Bogdan said. “If we can do that, I can guarantee our partners and the services will be happy campers.”
Lockheed, Pratt & Whitney, BAE Systems and Northrop Grumman — the four prime contractors involved with F-35 development — have given the Air Force assurances “at the CEO-level” that the F-35 will eventually be comparable in price to the aircraft they will replace, he said.
Frank Kendall, under secretary of defense for acquisition, technology and logistics, said in late September that the official government estimate still rests at more than $1 trillion.
“That’s the big rhinoceros,” Bogdan said of the $1.1 trillion estimate at the Air Force Association’s annual conference in September. “That is the number that has been hanging around for three years now. That cost estimate has not changed for three years because they haven’t done a cost estimate in three years.”
“No matter what that number is, we know if we don’t start to drive cost out of the life cycle of this airplane, it may not be affordable in the future for all of our partners or all of the U.S. [military services],” he added.
Still, the Pentagon IG found 719 problems stemming from “inadequate oversight” of contractors and suppliers by the Air Force and procurement officials. F-35 development has already cost $400 billion, giving it the dubious distinction of costliest weapons system development ever undertaken by the Defense Department.
Lorraine Martin, who heads the F-35 program for Lockheed, was confident that a new government cost analysis launched by Kendall’s office will support her and Bogdan’s assertions that the aircraft will cost significantly less than $1 trillion over its life cycle. That analysis is due later this year.
“The costs are coming down,” she said. “We are understanding them better. We are working hand in hand with all the partners in the program to understand the assumptions that were built into the cost. Every time we work this hard, we are able to find places where we can bring down that projected cost.”
Operation and sustainment costs are projected out over the half-century life cycle of the F-35, and include fuel, basing structure and personnel who maintain the jet and oversee the service’s fleets. Capping more immediate development cost overruns has been Bogdan’s focus since taking the program’s yolk a year ago.
Bogdan said engineers are playing “whack-a-mole” with a list of parts and systems that repeatedly malfunction. His office maintains that many of the problems identified in the IG report have been corrected since the study was completed in July.
“There are pieces and parts of this airplane that are simply breaking too much,” Bogdan said.
“When they break and we take them off the airplane, getting them repaired takes too long. The good news is, now that we have 8,000 flight hours … we have a very good list of all those bad actors. So we are systematically going through and applying engineering discipline and money and work to try and bring that list down.”
Bogdan used the F-35B tires as an example. Because the Marine Corps version of the jet can land vertically but take off conventionally, its tires must cushion its landing and grip a ship’s deck during takeoff. Durability and cushion are at the opposite ends of the spectrum of tire construction, so the “float” that the softer tires have means they wear down quickly after repeatedly rocketing down the runway of a big-deck amphibious ship.
“It is a hard technical challenge,” he said. “Those tires today come off the airplane way, way, way too often. There is no way operations can be sustained.”
To counter that and similar issues that have plagued F-35 development from the start, Bogdan took a page that was used with success in developing the Eurofighter Typhoon and the Navy’s Virginia-class submarine.
The Air Force, Lockheed and Pratt have created a “cost war room” staffed by experts in manufacturing, supply chain management and development and procurement whose task it is to systematically parse the jet’s entire life cycle, looking for efficiencies.
“I’m cautiously optimistic that over the next year or two we will see some good results out of that,” Bogdan said.
The cost war room is at Lockheed’s private development center near Crystal City, Va., where half a floor was given over to the full-time effort.
“I have told Lockheed, and I have told Pratt … the expectation is that lot over lot, the airplane’s price and the engine price will and must keep coming down,” Bogdan said. “There is no scenario I see where that can’t happen. Not on my watch. I won’t let that happen. The price needs to keep coming down, no matter what.”
Other systems designed specifically to make operations and maintenance of the F-35 efficient and cost effective, like the automatic logistics information system (ALIS), are “just flat-out late,” Bogdan said.
ALIS is a globally distributed data collection and dissemination program that allows operators to plan ahead, maintain and sustain the F-35 throughout an individual plane’s life cycle. It integrates operations, maintenance, prognostics, supply chain, customer support and technical data and makes it available at a moment’s notice for pilots and maintenance staff worldwide.
“ALIS is going to be a wonderful system some day, but we started way too late in applying the systems engineering discipline that is needed,” Bogdan said. “We’re doing it now, but we are in catch-up mode, and we’ll be in catch-up mode for a while.”
Costs per aircraft have been coming down with each lot purchased, both Bogdan and Martin said. From low-rate initial production lots one to five, the cost has decreased 55 percent across all three variants, Martin said. That accounts for a $500 million reduction from lots one to five. The Air Force’s conventional takeoff and landing version now sits at $150 million per copy, she said.
The Defense Department plans to spend $327 billion on airframes and $64 billion on engines for a total 2,457 F-35s.
Negotiations for lots six and seven were finalized in early October for 71 jets worth a total $7.1 billion.
The sixth batch includes 23 conventional takeoff and landing aircraft for the Air Force for $103 million per jet, six of the Marine Corps’ short-takeoff, vertical-landing version for $109 million per copy and seven of the Navy’s variant that flies from aircraft carriers for $120 million each.
The price per jet was less for all three variants in the seventh batch, which calls for 35 total aircraft at $3.4 billion. The Air Force variant ran $98 million per copy while the Marine Corps and Navy versions cost $104 million and $116 million per aircraft in that lot.
All three services have announced the dates they intend to declare initial operational capability, beginning with the Marine Corps in 2015. The Air Force will follow in 2016 and the Navy plans to begin operational flights in 2019. IOC is the point at which the service declares its version of the aircraft ready for combat.
After this certification, the jets should be able to perform close-air support and enemy aircraft interdiction, among other missions, Martin said. The software needed to conduct those missions is included in the 2B software suite, which is coded and in flight-testing.
As the three deadlines draw nearer, Lockheed is able to adjust its long-term cost estimates as it learns how the aircraft will be used by military services, Martin said.
“We’re learning things about the aircraft that are allowing us to change those assumptions and help bring them down,” Martin said. “We also are learning how the different services will operate the aircraft. It’s going to take close coordination with all the services and partners in clarifying those assumptions.”
The Marine Corps’ F-35B is the most expensive to operate, especially in short-takeoff, vertical landing mode, which uses both rearward and downward facing engines to fly. “As Marine officials further understand how long they plan to operate in STOVL mode, those assumptions can be included in [operations and sustainment] projection models and produce a more realistic estimate,” Martin said.
Recent expansion of foreign military sales also should help drive down future development and production cost, Bogdan said.
The Netherlands announced Sept. 17 it would purchase 37 F-35s in a contract worth $6 billion. It will spend another $260 million per year thereafter for operations and maintenance.
In a surprise decision, South Korean military officials announced a reversal of their decision to buy F-15s in favor of a stealthier aircraft like the F-35. It is not certain that the Koreans will purchase the F-35, but the decision rocketed Lockheed to the front of the pack.
“Partnership is a crucial part of this program for a lot of different reasons,” Bogdan said. “One of the main reasons is together, as we buy more airplanes, the price of the airplane comes down.”
The current estimates for total program cost are for U.S. jets. No one yet knows how much partner nations will end up spending on operations and maintenance of the lifetime of their planes, Bogdan said.
“Our partners come to us and ask, ‘what is it going to cost to have an F-35?’ We couldn’t give them a good answer,” Bogdan said. “That’s not good enough now, because they are investing real money. We’re going to take each nation, sit down with them and go over the assumptions of how they’re going to use the airplane … to come up with a unique cost model and unique [operation and sustainment] cost for each of the partner countries.”