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  • JSF - The GAO Weighs In
    Posted by Bill Sweetman 10:48 AM on Mar 22, 2010

    The good news for the JSF program in the March 20 Government Accountability Office report – combined with the other numbers released in March – is that the program is no longer at risk of failure.

    The bad news is that it has already failed.

    The strategic goal of JSF was to repeal Augustine’s Law XVI and enable the customers to replace existing fleets approximately one-for-one, while increasing the capability of each aircraft.

    The path to this goal was to use commonality to reach high production quantities, supporting high production rates and thereby containing procurement costs. At the same time, new technology was intended to reduce operating costs. The core doctrine was "cost as an independent variable" and the key function of the four-year X-plane program was to define a joint set of requirements that could be met at a low, fixed cost.

    It’s now clear that the strategic goal is out of reach. Even if today’s base-2010 average procurement unit costs ($106+ million for the F-35A and $127+ million for the B/C) are attained, the customers cannot afford planned production rates. Current USAF fighter funding – comprising, today, R&D and LRIP for the F-35 – will support 48 jets per year instead of the 80 required to recapitalize the force. Operational costs are predicted to exceed those of earlier fighters, in some cases by large margins.

    There will also be a spiral effect as the lower rates result in higher unit costs, and this has not yet been modelled. Its severity will also depend on factors yet to be quantified, such as how international partners respond to the cost increases.

    So the plan has failed - as did the previous plan to replace air combat fleets en masse with stealth aircraft, started in the mid-1980s. 

    As for the GAO report in detail:  Its recurring theme is that there are many further uncertainties ahead of the program, and all of them are downside. It could be argued that it’s the GAO’s job (as practitioners of the dismal science) to be critical or even negative. However, not even the program’s most avid boosters have advanced credible scenarios showing that projected costs and schedules could improve, and so far the GAO’s track record of predicting the program’s trajectory has been much better than that of program insiders.

    The GAO identifies risks in all three major cost areas:  SDD, procurement and operations.

    SDD

    • The alternate engine, if pursued, would add another $1.6 billion to SDD (page 7). However, the GAO also notes poor performance and overruns with the F135 (7 and 28).
    • The GAO notes that the management reserve has been depleted at a high rate, suggesting that the SDD bill has been underestimated (page 7).
    • Delays in testing to date raise questions as to whether the aggressive schedule now planned can be accomplished (page 9 and 22 onward).
    • Using labs to minimize the flight-testing required for software depends on accrediting those ground facilities – that is, proving that they are equivalent in validity to flight test – and this process is slow (page 25).
    • In order to keep to the paper schedule, software capabilities have been slipped to later Blocks. Navair has also predicted that development will be slowed as resources are split between testing new software and fixing previously tested code (page 26-27).
    • In contrast to Lockheed Martin, the GAO says that the final impact of the fix to the CV version’s keel structure has not been determined, and that the new fuel pump to be introduced in LRIP-3 is not expected to solve thermal management problems on its own (page 28 onwards).

    Procurement

    • Engine cost is well above estimates (page 9).
    • Navair in October 2009 predicted that procurement costs could be 15 per cent above JET estimates, because of late design changes, rework of earlier aircraft to definitive service standards, and upgrades.
    • Trends in cost reduction from one lot to another, assembly hours and cycle times have consistently been less favorable than predicted (page 14-15) and cost-reduction efforts have had “mixed results” (page 18).
    • The delay in DT/OT completion has more than offset the earlier 122-aircraft reduction in total buys in FY2011 through FY2015 in terms of concurrency. On current plans, US and international customers will order 564 aircraft in those years (page 21).
    • The procurement ramp-up relies heavily on foreign customers. See the page 21 charts showing FY2011 through FY2015 buys (2013-2017 deliveries). Overall, 38 per cent of aircraft in that period are supposed to go to international customers, with an increasing proportion towards the end of the period – in 2015, 45 per cent of the production run is for export. These numbers are straight from the Annex to the current production, sustainment and follow-on development MoU (page 88), but it is unthinkable that those will actually be attained given the customers’ budget constraints, the schedule and the real prices. The result is good news/bad news:  the ramp is not as steep, but the rate will be lower and the costs higher.

    Operations

    • The report notes Navair’s total operating cost estimates, and says unequivocally that F-35A O&S costs will be higher than those of the F-16 (page 12-13).

    In order even to meet current SDD cost estimates, the program will either have to be smart or lucky – with none of the above factors, singly or in combination, moving the needle significantly.

    Tags: ar99, jsf, gao

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