Mrt 24 2011

F-35 buyers from anxiety to paranoia over unpredictable costs

Gepubliceerd door om 22:51 onder Andere JSF landen

In an interesting analysis the Aviation Week journalists David A. Fulghum, Graham Warwick, Robert Wall, Alon Ben-David describe the rapidly growing concerns among potential F-35 buyers about new delays, new cost growth and decreasing initial operational capabilities:
Customers for Lockheed-Martin’s stealthy F-35 Joint Strike Fighter—among them Canada, Israel, Britain and Australia—are shifting their mood increasingly unpredictable costs.
Foreign analysts now expect JSF prices to significantly exceed even the latest Pentagon estimate, putting government officials in fiscal and political jeopardy as they try to craft a rational purchase plan for the fifth-generation warplane.

About the USA:

Adding new concern was congressional testimony by Lt. Gen. Mark Shackleford, military deputy to the assistant secretary of the Air Force for acquisitons, who says that ”we currently expect up to a two-year delay” in fielding the first operational unit, which shifts the date to 2018. The delay is being triggered by the most recent program restructuring.
Software is another area of imperfect cost estimates. The early software development packages are projected to be two years late for each block, the result of underestimating the time and resources required, and the need for new code continues to grow. As software is rebuilt and added, “costs have grown by 40 percent,” Sullivan says.

About Canada, Parliamentary Budget Officer Report

A new report by Canada’s Office of the Parliamentary Budget Officer (download here Full PDF) estimates that total program costs for the country’s 65 aircraft will be U.S. $29 billion which means a total program (through-life) unit price tag of about $450 million per aircraft in Fiscal 2009 dollars.
Canada’s report—“An Estimate of the Fiscal Impact of Canada’s Proposed Acquisition of the F-35 Lightning II Joint Strike Fighter”—came out March 10. The report predicts that average unit production cost for its F-35s will be $148 million with an additional $15 million for the engine, which brings the total to $163 million per aircraft. Cost estimates given to Congress last week say the fourth low-rate initial production batch, with engines, will cost $127 million per aircraft for the F-35A, $141 million for the F-35B and $158 million for the F-35C.
“It is not immediately obvious, given the available evidence, how the cost can be reduced to estimates predicted by Lockheed Martin over 10 years ago,” the Canadian report says. “Overall, F-35 development is now five years behind the schedule set at the outset of the program, and total [development] overruns are projected to exceed $21 billion, or 60% above the original goal.Unless there is compelling evidence to the contrary, it is difficult to see prices reducing to their original estimated level,” it concludes.

About Israeli: go ahead or postpone?

For Israel, a long, list of unique requirements from the Israeli air force (IAF) has almost disappeared for the first 19 JSFs. Options for installing Israeli weaponry produced a staggering price tag, while plans to fit the F-35 with Israeli electronic warfare systems were rejected for both technological and political reasons.
Israel’s defense establishment is divided on the question of whether to go ahead with procurement of F-35s, despite expected delays, or to postpone the program until costs and schedules are clear. Jerusalem is expected to be the first international customer for the F-35A with deliveries to begin in 2015. But recent discussions with the F-35 program and Lockheed Martin officials made it clear that there will be delays in delivery, with Israeli estimates varying from two months to two years.
The cost to Israel will be $145 million each for 19 A-model aircraft. But there is talk of using near-term F-35 funding for other projects. “Despite the F-35’s advantages, it will not be the panacea for Israel’s problems and most of its tasks can be performed with similar effectiveness through existing planes with one upgrade or another,” claims a February report by the Institute for National Security Studies.

About the United Kingdom

Britain is concerned about the cost of F-35 upgrades because of problems during earlier collaborations with the U.S. In its Lockheed Martin C-130J program the U.K. was forced to closely integrate upgrade plans with the U.S., rather than allowing indigenous modifications at a lower price as it did in the earlier C-130K buy. British army officers told Aviation Week that the computerized air-drop system was flawed, making cargo recovery in Afghanistan more difficult and dangerous. With the F-35, the situation is expected to be even more extreme, says a British government official.

The Canadian JSF audit also drew Britain’s attention. U.K. officials say its cost assumptions seem credible. As with Canada, they note that it has been difficult to properly assess underlying program costs. JSF concerns come as the British government is trying to adopt more realistic budget planning, with Defense Secretary Liam Fox vowing that only fully funded programs will proceed.

Australia fears repeat of previous miscalculations

Australia has also been the victim of U.S. miscalculations in an earlier cutting-edge project. Its Boeing/Northrop Grumman Wedgetail surveillance aircraft is more than four years behind schedule as Canberra considers the F-35. The airborne early warning and control aircraft’s software cost and schedule problems mirror those of the F-35.
Others point to earlier disappointments with buying into advanced U.S. technology. A senior Royal Australian Air Force officer with insight into the Boeing/Northrop Grumman Wedgetail aircraft, summed up the dilemma of foreign purchasers: “It’s great kit and just what we needed, but it would have been so helpful and caused us so much less pain [with the government] if we had been told up front how big that radar was going to be [3.5 tons], how long it actually was going to take [five years over schedule] and how much it was actually going to cost [more than $4 billion].”

Aviation Week; 22-mar-2011; “JSF Cost Predictions Rattle Foreign Customers”

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