May 3, 2012

GOOD MONEY AFTER BAD:

The Jet That Ate the Pentagon: The F-35 is a boondoggle. It's time to throw it in the trash bin. (WINSLOW WHEELER | APRIL 26, 2012, Foreign Policy)

A review of the F-35's cost, schedule, and performance -- three essential measures of any Pentagon program -- shows the problems are fundamental and still growing.

First, with regard to cost -- a particularly important factor in what politicians keep saying is an austere defense budget environment -- the F-35 is simply unaffordable. Although the plane was originally billed as a low-cost solution, major cost increases have plagued the program throughout the last decade. Last year, Pentagon leadership told Congress the acquisition price had increased another 16 percent, from $328.3 billion to $379.4 billion for the 2,457 aircraft to be bought. Not to worry, however -- they pledged to finally reverse the growth.

The result? This February, the price increased another 4 percent to $395.7 billion and then even further in April. Don't expect the cost overruns to end there: The test program is only 20 percent complete, the Government Accountability Office has reported, and the toughest tests are yet to come. Overall, the program's cost has grown 75 percent from its original 2001 estimate of $226.5 billion -- and that was for a larger buy of 2,866 aircraft.

Hundreds of F-35s will be built before 2019, when initial testing is complete. The additional cost to engineer modifications to fix the inevitable deficiencies that will be uncovered is unknown, but it is sure to exceed the $534 million already known from tests so far. The total program unit cost for each individual F-35, now at $161 million, is only a temporary plateau. Expect yet another increase in early 2013, when a new round of budget restrictions is sure to hit the Pentagon, and the F-35 will take more hits in the form of reducing the numbers to be bought, thereby increasing the unit cost of each plane.

A final note on expense: The F-35 will actually cost multiples of the $395.7 billion cited above. That is the current estimate only to acquire it, not the full life-cycle cost to operate it. The current appraisal for operations and support is $1.1 trillion -- making for a grand total of $1.5 trillion, or more than the annual GDP of Spain. And that estimate is wildly optimistic: It assumes the F-35 will only be 42 percent more expensive to operate than an F-16, but the F-35 is much more complex. The only other "fifth generation" aircraft, the F-22 from the same manufacturer, is in some respects less complex than the F-35, but in 2010, it cost 300 percent more to operate per hour than the F-16. To be very conservative, expect the F-35 to be twice the operating and support cost of the F-16.

Already unaffordable, the F-35's price is headed in one direction -- due north.

Posted by at May 3, 2012 5:48 AM
  

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