AF-1 and AF-2 Arrival at Edwards Air Force Base

WASHINGTON: The most expensive conventional weapons program in history just scored a major win, with the F-35 program’s estimated acquisition costs plunging $11.5 billion. This is no program estimate that critics might savage. This comes from the Government Accountability Office’s definitive annual Assessment of Selected Weapons Report.

The GAO did not mince words in identifying the biggest winner in its analysis of the Pentagon’s major weapons programs:

The most significant of these decreases is the $11.5 billion reduction to the F-35 Joint Strike Fighter program’s estimate, due solely to efficiencies found within the program as no decrease in quantities was reported.

While the F-35 came down, the Evolved Expendable Launch Vehicle blew up, with those costs rising $28.1 billion, or a very impressive 78 percent

Lockheed Martin’s management of the F-35 came in for a mix of praise and criticism from GAO, especially on production.

“The contractor uses statistical process controls as one means to assess critical manufacturing processes. Twenty five percent of those processes are currently judged capable of consistently producing quality parts at the best practice standards,” the report says. “Production efforts have improved as the production line continues to show efficiencies and quality metrics show positive trends. However, in 2013, problems with engine hoses, engine turbines, and specialty metals halted production deliveries for three months. In 2013, 35 planes were delivered to the government—eight less than originally planned. Aircraft deliveries were postponed for one month while the runway at the final assembly facility was resurfaced.”

Overall, the GAO gave the US military some credit for improving its management of taxpayer dollars. While the overall size of the Pentagon’s acquisition portfolio rose, GAO says that was due to a “few” programs.

“The estimated cost of DOD’s 2013 portfolio of 80 weapon programs is $14.1 billion more than the 2012 portfolio of 85 programs. The 80 programs within this year’s portfolio have had estimated cost increases of $12.6 billion against their estimates from a year ago and an average of 2 months increase in schedule,” GAO says. “This increase masks otherwise positive trends as 50 of 80 programs in the portfolio decreased their total acquisition costs and the majority of the cost increases can be traced to either the effects of additional procurement quantities or inefficiencies experienced in a few programs.”

If you look at the EELV increase, that eats up an awful lost of the increase and GAO puts it simply:

“While the overall cost of the 2013 portfolio has increased, 50 of the 80 programs within the portfolio reduced their costs over the past year. The majority of the net cost growth can be attributed to a single program, the Evolved Expendable Launch Vehicle (EELV).”

Comments

  • Gary Church

    11.5 from the total program cost? 11.5 from what? If the 11.5 billion from one trillion it is not much and doubtless will be added down the line. And how did it suddenly disappear? I don’t get it.

    • Matthew Morgan

      Paragraph 1, line 2:

      “the F-35 program’s estimated acquisition costs plunging $11.5 billion.”

      As for how the costs lowered,
      paragraph 3:

      “The most significant of these decreases is the $11.5 billion reduction to the F-35 Joint Strike Fighter program’s estimate, due solely to inefficiencies found within the program as no decrease in quantities was reported.”

      It’s truly amazing what one could learn if they actually read the article and not just the headline.

      • http://www.breakingdefense.com/ Colin Clark

        Nice try. There is no IN attached to those efficiencies…

        • Matthew Morgan

          Oh my, I’m not even sure how it got there.
          Well it’s fixed now, the last thing we need is more confusion in the debate

      • Gary Church

        It’s truly amazing when you ask a simple question and get a bunch of double talk that completely avoids it as an answer. The cost of the program is about a trillion dollars over the next half century. 11.5 from a trillion is……not meaningful. If it is a different number that is being subtracted from then state it….if you can. I would like to be clear on the numbers because some of the price tags on these programs are so incredible I have started making mistakes and getting the costs of 400 foot ships and twin engine cargo planes confused.

        • Matthew Morgan

          Well exactly, in fact 1 trillion over half a century isn’t as much as one might think.

          Hell if current trends persist, that will only by .5% of the defense budget during that time period.

          • Gary Church

            One trillion divided by 50 is a hell of a lot of money if you want to do things like rebuild your transportation infrastructure, build a new energy industry, subsidize health care and education, invest in new technology (that does not kill people), paying off what we owe other countries; the stuff that actually does something besides make money for defense industry shareholders.

            The “current trend” cannot persist; we are out of money.

          • estuartj

            I don’t think this is the correct forum to discus non-defense related spending priorities. I’m not disagreeing, but this isn’t the place for that discussion. Now to your original point, I’m trying to find what number GAO is working from to get that % off of, GAO is (unfortunatly) not very good at giving background on their own statements, but if I’m reading it right then the $11.5B is just off the total procurement cost – I also gather that GAO wasn’t looking at
            maintenance costs at all, just the purchases.

          • bobbymike34

            If the Federal Government is set to spend $300+ Trillion over the next 50 years then $1 Trillion isn’t that much.
            But I have posted responses before if base budget defense spending is set to continue to shrink as a percentage of the Federal Budget then it is folly to keep repeating the mantra, defense, defense, defense over and over even when former Clinton budget director Alice Rivlin said years ago, ‘Entitlements will drive 100% of the future years deficit and debt”

  • CharleyA

    OK, I’m confused – are not Selected Acquisition Reports prepared by the DoD? I think the GAO’s version of cost reports is called “Assessments of Selected Weapon Programs” Also, an $11.5 billion decrease is less than what the Program Office predicted some months back ($857B over 55 years vs the 1.1T previous estimate (22 percent decrease) … So we need some context and clarification.

    • http://www.breakingdefense.com/ Colin Clark

      You are correct. I let Selected get into my head. It’s not SAR. It’s GAO’s Assessments of Selected Weapon Programs.
      Fixed. Apologies.

  • ELP

    –“This is no program estimate that critics might savage. “– Wow. That is indeed impressive. From an aircraft program that is in deep trouble with no proof of credible, working mission systems, over 12 years after contract award. And what are they building? When looking at the serious lack of operational testing, they do not know. However “mistake-jets” is an accurate term. That and what is being built is too weak to take on emerging threats and too expensive to own and operate for weaker threats. Read back over the DOTE reports over the last few years. They are no testing results that an F-35 fan may savage.

  • Gary Church

    “$857B over 55 years vs the 1.1T previous estimate (22 percent decrease-”

    Thanks CharleyA.
    Let’s just call it a trillion because that is what it is going to end up- probably more. One look at that lift fan system and this old airplane mech can testify to that. My math is not too good lately but if a trillion is a thousand billion then that would be….a one percent “plunge”? Someone check me- is that right? More like a drop in the bucket.

    • dabews

      Just so were clear by your standards 2% is a hell of a lot of money but 1 % is a drop in the bucket?

      “One trillion divided by 50 is a hell of a lot of money…”

      “a one percent “plunge”? Someone check me- is that right? More like a drop in the bucket.”

      My opinion on the F35 is very much fluid but my opinion that $11.5B is a big lump of change will always be the same.
      The F35 was going to be very expensive from the beginning, Anyone who follows military procurement could have told you that. But any program which can cut costs by even 0.1% without cutting quantities or standards deserves a pat on the back. Im sure there is a lot more savings to be had so hopefully we will see a similar story in a years time.

      • estuartj

        My problem with procurement isn’t just the F-35, but the train of failed procurement programs. I’m not even as worried about the ones like the USMC’s AAVs, but the ones that really bother me are the SSN-21, DDG-1000 and now LCS. The opportunity loss on those three probably equals at least 20-25 ships “missing” from the battleforce because they either couldn’t build or couldn’t make up their mellons on what to build. The F-22 and F-35 are following a similair trajectory that I fear will leave the combined services “short” of their requirements by hundreds of aircraft. It doesn’t matter how good your ships or planes are if you don’t have enough of them (or the maintenence funds to repair them) to field a credible force where and when needed.

        • Gary Church

          I agree but only if you qualify “credible.” Rummy telling a crowd of soldiers that they have to go to war with what they have comes to mind. Only what he gave them was completely inappropriate to the threats they were facing. The defense industry plays both ends against the middle with the argument that only the best is credible and that is what makes this such a happy game for them. They can simply say “it’s not good enough for the troops” and jack the price up and drag it out. When war comes you have the people who made the mess smiling and saying you go with what you got, not what you wish you had. It is infuriating to me but makes perfect sense to them. A far less expensive air force F-35 and different aircraft for the other services instead of pouring billions into the vertical landing and carrier versions was the answer but it is far too late for that now. The damage is done and IMO they should just drive a stake in it’s heart and start over.

          • estuartj

            We can all disagree on how credible the existing fleet is, but I was just refering to being able to put those assets where there are needed. If there aren’t enough ships (or planes) available to meet operation, training and maintenance requirements you potentially have no force at all.

          • Gary Church

            I agree with that of course. I have seen it more than once; a bunch of broken airplanes on the ramp with no parts for them; even the hangar queens were stripped naked. And I have seen the opposite with a different plane of better all around design and support; an couple planes in the hangar getting worked on and an empty ramp because the rest were all out flying. Where this aircraft will be in that spectrum is indicated to me by that lift fan system and how much it costs. It looks like a piece of junk to me. I could be wrong but I doubt it.

      • Gary Church

        This program does not deserve a “pat on the back.” It deserves to be canceled.

        Yes, a 1 percent “plunge” for an outrageously expensive program is a drop in the bucket and 2 percent of that vast 1 trillion dollar fortune is quite a bit of money when applied to anything other than a useless hyper-inflated defense program.

        “Pat on the back” sleazy reasoning only makes sense to the sleazy.

        • F-35 Backer

          And what aiplane do you propose protect your backside while you moan and groan about the cost of this program WHICH by the way covers not ONE but THREE branches of the U.S. Military? The costs have been driven lower and lower and when the dust clears this single engine airplane will DOMINATE the sky. Until you get in it and fly it, quit whining.

  • F-35 Photographer

    Thanks for the news. Meantime here you can take a look at some great F-35 photos:

    F-35 Joint Strike Fighter Pictures

  • Reginald Bronner

    So inflated costs shrink under scrutiny? Really? Will wonders never cease.

  • Don Bacon

    This “GAO Report” was actually done by a consultant firm (natch) with ties to the Pentagon and Lockheed. According to this Defense News article, this analysis of the US Defense Department’s 63 top weapons programs was compiled by analytical firm VisualDoD.

    VISUAL DOD
    Board of Advisors, including:

    Dr. Stephen Cambone
    Stephen A. Cambone was confirmed by the U.S. Senate as the Under Secretary of Defense for Intelligence on March 7th, 2003. . . .

    Emerson “Emo” Gardner, LtGen USMC (Ret.)
    Senior Defense Advisor, Potomac Research Group–
    General Gardner specializes in defense and aerospace markets. He completed 37 years of service as a Marine officer in 2010, most recently in the Office of Secretary of Defense as Principal Deputy Director for Cost Assessment and Program Evaluation. . . .

    and last but not least–

    Dave Markham
    Mr. Markham serves as the Corporate Affordability Officer at Lockheed Martin Corporation. . . .

    • SMSgt Mac

      Visual DoD does work for Defense News. Those graphics are made for Defense News, using information that may or may not closely correlate to the GAO report. In all probability, it does correlate….Because the GAO report is simply an evaluation of trends using Selected Acquisition Reports over time. Those responsible for the GAO report IN the GAO, including those specifically who worked the F-35 data are listed in the back of the report. They are all good public servants. If it mattered, I would point out that the first two gentlemen on your list were hired after the first of this year, so even if your Circumstantial Ad Hominem were relevant (it is not), you’d still be wrong. But it’s not relevant. To summarize, you are still batting .0000 on the F-35. To your credit, you have not yet started blathering about really big scary lifetime O&S Costs just because you don’t understand economics, inflation, and the present vs future value of money.

      • Gary Church

        And you don’t understand how much this monstrosity actually costs.
        To summarize; the revolving door policy works. The mergers have allowed the corporations to turn the acquisition process into robbery. The amount of money being squandered on this poorly designed single engine tactical aircraft is……mind boggling. Anybody who accuses other people of “not understanding” is missing the plank in their own eye.

        • SMSgt Mac

          Say, you discovered this little corner of the web AFTER Colin addressed this issue didn’t you?
          http://breakingdefense.com/2013/05/what-will-the-new-f-35-life-cycle-costs-be-and-do-they-matter/
          It was a great article, as I pointed out at my place. Search:
          Colin Clark: “Cost Estimates” and the F-35.
          And yes, I Grok $Bs and $Ts. Of course most people do it well enough to know that the ‘Trillion $” figure isn’t ‘real’.

          • Gary Church

            Whatever you are babbling about concerning a trillion dollars not being real has nothing to do with the very real and immense cost of the junk strike fighter. This program is the biggest scam in defense program history. What a rip-off. All the prevarication and technobabble and dozens of different cost adjustments confusing the issue will not hide the truth much longer; it’s a loser.

  • des111168

    Uh, GAO is garbage in, garbage out: their estimates are based only on the figures given to them by sources… like the Pentagon. By law they have to accept the inputs they’re given. Remember when Obamacare was affordable and would reduce the defecit? Yeah. I’ll wager it’s the same here. And it’s not GAO’s fault. Their estimates are simply based on figures they’re told they have to use.

    • Gary Church

      Why drag Obamacare into something totally unrelated? Oh….I know why, never mind.
      Sleazy.

      • des111168

        It’s a recent example of how the GAO has to operate, i.e. in this case, the Administration gives the GAO bad numbers on Obamacare, and GAO has to use them, thus giving a forecast that doesn’t add up. I could have used any number of examples, but that one was appropriate.

        • Gary Church

          How do numbers for a health care plan and a fighter plane match up? Only in your imagination. We are talking about a defense project here smart guy. Why don’t you stick to that and go somewhere else to discuss health care?

          • bobbymike34

            He is not trying to ‘match up’ a healthcare program and a fighter program he simply using an example where we might question the validity of GAO numbers based on a previous example, healthcare, that produced inaccurate numbers.
            If a government department has a track record of producing incorrect or invalid cost analysis of course previous examples are perfectly reasonable to bring up.
            The correct response, however, is that he is actually referring to how the CBO operates not the GAO.
            On another note I don’t think it is up to ‘Gary Church’ to patrol the internet and determine the content of a comment thread.

          • Gary Church

            I just happen to support Obamacare and do not support the F-35. And guess what?

            It IS up to Gary Church to patrol the internet if he wants to:)

          • estuartj

            Support or lack of it for ACA or the F-35 or LCS is irrelevant, the point GAO is forced to use the numbers given to it, which apparently can be bogus. I work with the GAO on lots of oversight issues and this isn’t as cut and dry as it sounds. They aren’t complete fools obviously and aren’t quite that easily bamboozled. That said they are forced to work with a data set that has serious bias/reliability issues.

          • Gary Church

            You make them sound like fools if they are “forced” to use biased and unreliable data.

          • bobbymike34

            Conveniently left out the 2nd part ‘and determine content’. Do what ever you want on the internet but quit being censorious thought you leftist love free speech?

  • Don Bacon

    The most expensive conventional weapons program in history just scored a major win, with the F-35 program’s estimated acquisition costs plunging $11.5 billion.

    The simple truth is that they have no idea what the acquisition costs will be once they go sole-source after Milestone C production approval scheduled (not firm) in Apr 2019 to Lockheed Martin. So they pull numbers out of thin air and then revise them when politically required.

    Look at the current FY2014 budget costs for F-35 prototypes:
    A $157m 19 @ $2,989,270
    B $211m 6 @ $1,267,260
    C $283m 4 @ $1,135,444

    The costs will be less in full production, but how much less?
    Lockheed will decide how much less — take it or leave it.
    Nobody knows, certainly not VisualDOD bought-and-paid-for consultants.

    A marker–
    2400 F-35s at $200m = $480 billion.

    As described below, an $11 billion “decrease” (in their wild ass guess) is statistically insignificant, especially given the uncertainty of having to deal with the characteristically under-performing and malfeasant (according to GAO) Lockheed Martin Corporation, which by the way owns all the data rights to the taxpayer-funded non-performing F-35 aircraft which is currently halfway through its development testing — the easy half, with many problems requiring depot retrofit and many unrealized performance specs. Plus the carrier variant doesn’t work.

  • Don Bacon

    High acquisition cost is only a third of the astronomical $1.5T F-35 life cycle program costs.

    Assistant Air Force Secretary William LaPlante, reported by Reuters:

    “The operation and sustainment cost is a bigger issue. It’s the one that will say whether or not we can afford (the F-35)” in the longer run.

    F-35 reliability is a huge problem, reported in abc.net::

    Lieutenant General Bogdan said with more planes in the skies, program bosses now know parts are coming off the aircraft “too frequently” for maintenance.

    “The problem here is you’re not going to see results in the next two to three months,” he said. “It’s going to take months and months and months of constant efforts to see this improve.

  • Nicolas Protonotarios

    Having worked as a defence economist for years, I have a deep mistrust of any weapons cost statistics. In fact, trying to tie down cost estimates on such a complex project as the “cheap” stealth fighter is simply futile. What I found most disturbing is that this optimistic piece of news comes at the heels of contrary info just a week ago, when estimates gave the program the thumbs down. The only way to have a realistic picture about final cost is to know the final development cost which is still open-ended. Even then, however, upgrades to the systems, as is the norm nowadays, will probably change that picture as well. Better stick to robots…

  • estuartj

    Off subject, but USNI has a great write-up on the proposed “Sea Control Frigate” alterntive to the LCS or enhanced LCS. Basically for only 30% more we get double the endurance, built in ASW and limited area AAW capability on a hardened hull form. Sounds like a winnner IF the Navy Brass can swallow their pride and buy a suped up version of a Coast Guard Cutter
    http://www.usni.org/magazines/proceedings/2014-04/its-time-sea-control-frigate#footnotes

    • Gary Church

      Better off buying U-boats from the Krauts.

      • @NotRizzo

        I know you’re utterly convinced at the death of the surface ship, but I am unconvinced. I’d like to see this little guy try to escort a convoy from Perth to Singapore. Unless you plan to make Phibs, tankers and supply ships submersible too. The advance of ASCM technology has made air defense harder, but not impossible – and still very necessary.

        • Gary Church

          I know you know I am utterly convinced. I think it is impossible to defend against these missiles. Your escorts will be sunk by enemy submarines launching anti-ship missiles. Unless our submarines are out there waiting to sink their subs first. The one with the most submarines wins. Nuclear subs are too expensive to build the several hundred necessary to “escort” your convoys.
          License-build U-boats.

          As for air defense- they have drones air-refueling each other now and fighter drones that can be mass produced in numbers far beyond any manned aircraft. Welcome to the age of robots and missiles.

          • @NotRizzo

            I actually think the Navy is ahead of the threat curve so far, the DF-21D for all it’s hype has never been field tested. Meanwhile the SM-3/AegisBMD system has already achieved IOC and is moving to Block II. As for the ASCM threat, it really isn’t anything new, and though supersonic speeds close the engagement envelop, they really aren’t that hard to hit. The real threat is the cost exchange ratio, there are technology developments pending that can alter this, but until those systems get out of the lab later this year I’ll stick to being cautiously optimistic.

          • Gary Church

            “As for the ASCM threat, it really isn’t anything new-”
            “they really aren’t that hard to hit.”

            I have to completely disagree. The new missiles ARE new and they are extremely difficult to hit.

            http://en.wikipedia.org/wiki/3M-54_Klub

            You will get so many “leakers” with these things that a swarm attack will do any surface combatants in. And there is worse on the way. You better believe it.

          • Gary Church
          • estuartj

            So Saab’s promo video is supposed to impress? I think not. Ditto the Klub. Supersonic speed does not make you harder to hit, in fact it is often the exact opposite. Also, random or pre-programmed evasive maneuvers are more likely to be counterproductive compared to maintaining a minimum profile. The only advantage of the supersonic “sprint” is reducing the reaction time.

          • estuartj

            If anyone is really interested in the AAW challenges and how they are being addressed I saw this today from CIMSEC (center for International Maritime Security).
            http://cimsec.org/surface-warfare-lynchpin-naval-integrated-airmissile-defense/

          • Gary Church

            Surface Warfare lobby propaganda. You can’t stop the new missiles. Surface combatants are like horses against machine guns.

            “As for the ASCM threat, it really isn’t anything new-”
            “they really aren’t that hard to hit.”

            You are completely deluded. And that mindset is going to get alot of sailors killed.

          • Gary Church

            “Supersonic speed does not make you harder to hit, in fact it is often the exact opposite.”

            then;

            “advantage of the supersonic “sprint” is reducing the reaction time”

            You are just arguing to argue- nobody could possibly believe they are not harder to hit. If you are not impressed then you will die like the rest I guess.

  • F35 Backer

    Gary, you know nothing about this airplane. The report speaks for itself. Just quit whining about the airplane that will be protecting your backside and go back to being just another naysayer.

  • CharleyA

    The 2013 SAR was just released, F-35 costs are up about 2%.