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  • Wrongheaded? Really?
    Posted by Bill Sweetman 11:28 AM on Oct 18, 2012

    Aviation Week’s editorial of October 1 recommended re-injecting some competition into the US fighter business, and has taken some flak from Lockheed Martin consultant Loren Thompson, writing in Forbes. “Wrongheaded...  ridiculously misleading… they don’t understand the numbers,” fumes Thompson.

    There’s one important element missing from Thompson’s piece and one that is strangely hard to find. The missing piece is a link to what we actually said, which in many respects is not what Thompson is picking a fight with.

    What is hard to find is where Forbes reminds its readers who Thompson works for. It’s there, but in the kind of typeface usually associated with writing Title 10 of the US Code on the back of a postage stamp, and then only if you click in the right place.

    We did point out that “the cost to develop and produce the aircraft has grown to $330.5 billion, far more than the original $177.1 billion estimate (both in 2012 dollars)” and that “On schedule and affordability, the JSF program is already a failure.” Thompson doesn’t argue with the first point. He does try to tackle the second, not very convincingly. But then he spends a lot of time trying to establish that the overrun is not Lockheed Martin’s fault, which wasn’t a point that we made in the first place.

    Most of us would take the view that if an 80 percent cost overrun is a success, we’d hate to see failure. That view, according to Thompson, is “essentially wrong”.

    The plane is meeting all of its key performance criteria in tests, and the government’s own cost projections indicate that by the time it reaches full-rate production at the end of the decade, it will cost about what current fighters do — while delivering big gains in survivability, range, payload and other measures.

    The first statement is false on its face, because many key performance parameters have not been tested yet. As for cost, the most favorable government projections show that the F-35A will always be more costly than the Super Hornet (the only current fighter for which fully comparable numbers are available) while the directly comparable F-35C carries a price tag more than 40 percent higher.

    However, Thompson’s bigger point is that the cost increases result from government actions, including cutting the size of early production batches and adding more flight-testing. He’s correct in that those actions can increase costs.

    The Pentagon did not take those steps to make Thompson’s customers look bad. The original production plans were scaled back because flight-testing was late. Flight testing is late because almost all the test aircraft were delivered late, many by double-digit months, and because, when they were delivered, they did not fly a dozen test sorties per month each, as program bosses promised for years.

    And the Pentagon did not, strictly speaking, add flight tests:  It directed the restoration of flight tests that had been cut out of the schedule before 2006 (in an attempt to recover schedule after 2004’s weight disaster), because experience had shown that the justification for cuts – that modeling and simulation would mean less flying was needed – was unfounded.

    “It isn’t true that most of the increase is due to screw-ups by the prime contractor,” Thompson says, gamely arguing a point we didn’t make. However, he goes on to admit that almost two-thirds of the overrun, or $96 billion, can be laid at the door of the contractor team – he just blames a lot of it on Pratt & Whitney. (Which, let us recall, was the company that Thompson wanted to have a monopoly position on JSF because of its supposedly mature, lower-risk design.)

    A quarter of the increase “is traceable to changes in the way the government projects future costs”. This may well be true. On the other hand, if your estimates up to now have been wrong by $96 billion, you might not be smart to leave your accounting practices unexamined. 

    Thompson is not fond of the trillion-dollar cost estimate for lifetime support, and has lots of reasons for downgrading it. But that misses three vital points.

    First, somewhere in the build-up to that trillion-dollar cost is a cost-per-flight-hour that was claimed as recently as 2010 to be 20 percent lower than “legacy” aircraft – F-16s for most people – and that even Lockheed Martin admits will be 12 percent more than an F-16. (That’s a 40 percent increase.)

    Second, operating cost has been raised as a major concern by the JSF Program Office itself.

    Third, the scary total number is significant in that it quantifies the Pentagon’s opportunity cost – just how much of its resources are being committed to tactical air under the JSF program, money that can’t be used for seapower, long-range air... you name it.

    Some of the JSF fans out there think the Thompson piece is the last word. But maybe they should be nervous, and remember this classic quote:

    If you don't follow the defense business closely, then you can be excused for believing that the F-35 joint strike fighter is in trouble.

    Within weeks, the program manager had been fired. Within months, outside review teams found enough nasties in the woodshed to delay the program by multiple years, and tens of billions, getting us to a point where (as Thompson doesn’t seem to want to tell Forbes readers) we still don’t have an initial operational capability date.

    Tags: ar99, jsf, tacair

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