Contractors Dispute F-35 Cost Report

By Bill Sweetman
Source: Aviation Week & Space Technology
December 30, 2013
Credit: Paul Weatherman

A Rand Corp. report produced to guide future U.S. Air Force program plans has concluded that the F-35 Joint Strike Fighter program will cost more than three single-service programs would have done. That conclusion drew a sharp riposte from Lockheed Martin, which accused the report's authors of using “outdated data” that overstated the F-35's projected operating costs by a factor of two.

Lockheed Martin based its criticism on numbers that cannot be found in the report. The company declined to give a source for those numbers, stating that they were “government data.” The Joint Strike Fighter program office distanced itself from the argument, saying it had “no real issues” with the report, and did not confirm any of the company's figures.

Rand's Project Air Force team produced the report, which was requested in 2012 by then-commander of Air Force Materiel Command Gen. Donald Hoffman, as it became clear the JSF would be running many years behind the schedule that was planned up to 2010.

The study was based on historic data up to November 2011, including the fiscal year 2010 selected acquisition report (SAR). Rand, a think tank founded by the Air Force and still closely associated with the service, did not use the fiscal year 2011 SAR (issued in March 2012) which disclosed a three-year slip in development and actually reported higher cost projections than the 2010 report.

Because the JSF program is incomplete, and because no other joint fighter program has been completed as planned, the researchers used data from a variety of programs—from the F/A-18E/F and F-22 fighters to the T-6A turboprop trainer and E-8C surveillance platform—to gauge the historical cost increases in joint and single-service programs.

They did not focus on absolute costs, but on the percentage growth of estimated costs between the launch of a full-scale development program (Milestone B; MS B) and points five and nine years after MS B, the latter corresponding to the most recent JSF data available in late 2011.

The first conclusion drawn from this data was that the average estimated cost of all joint aircraft programs grew faster than that of single-service programs at both the five- and nine-year points, and that the lowest cost-growth rate of any joint program was higher than the fastest-growing single-service program: Even the T-6 grew faster than the C-17, which came close to being canceled because of its cost growth.

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