Friday, May 20, 2011

DoD: Operating Costs Biggest Threat to F-35

The Pentagon estimates the total cost of operating the U.S. military's F-35s through 2065 at more than $1 trillion, and that's the program's biggest long-term challenge, a bevy of top DoD officials told the Senate Armed Services Committee on May 19.
"Over the lifetime of this program, the decade or so, the per-aircraft cost of the 2,443 aircraft has doubled in real terms," procurement Chief Ashton Carter said. "That's what it's going to cost if we keep doing what we're doing. That's unacceptable. That's unaffordable."
And although operating expenses won't really take off for some years, cost-saving efforts must begin.
"Nobody is going to pay that bill," Carter said. "It's way too high."
Still, he said, the $1 trillion number shouldn't be taken at face value because it's such a long-term sum and because various management steps will bring down the cost.
"I truly believe that we can manage out a substantial number of the production and sustainment costs," Carter said.
"Having the thing costs much more than buying the thing. Seventy cents of the cost of every program is having it, 30 cents is getting it," Carter said.
Christine Fox, who leads the Defense Department's Cost Assessment and Program Evaluation (CAPE) office, said that the F-35's sustainment costs are not quite as high as that of its larger fifth-generation sibling, the F-22 Raptor, but match those of the older and considerably larger F-15C Eagle. Sustainment costs exceed those of the F-16 and F/A-18, which the F-35 is supposed to replace.
"Given the significant increase in capability, it is not unreasonable that JSF costs more to operate and sustain than some legacy aircraft," Fox said. "However, the fact that it will cost about 33 percent more to operate JSF relative to the F-16 and F/A-18 aircraft it is replacing gives the department a significant bill."
The Defense Department and the F-35 program office are going to analyze sustainment costs through 2065. The current sum is mammoth, but Fox and Government Accountability Office acquisitions director Michael Sullivan warned that it is difficult to accurately estimate sustainment costs.
Vice Adm. David Venlet, who spoke to reporters after his testimony, said that scouring sustainment costs for savings would continue after Carter's formal review.
The Defense Department is scrubbing the program from top to bottom in a "should cost" analysis that will inform a new baseline for the program. The "should cost" analysis numbers are factoring into the negotiations with contractor Lockheed Martin to build the jet.

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