Donald Trump announced a $600 million cut to the cost of the F-35 joint strike fighter. That sounds pretty good, unless you look at the $600 million stacked up against the total program cost, which is going to be nearly $1 trillion by the time the first-order fleecing is complete. [cnbc]
It’s hard to sort through what’s going to cost what – deliberately hard. That ought to be a warning to anyone, and anyone who has studied defense procurement at all knows that procurement pricing is a great big game – if Lockheed Martin gave Donald Trump a $600 cost-cut, it was probably by leaving out the seats of the aircraft, or something. “Oh, you wanted seats? Those are an option. Lemme see, seats are $2 billion now. You should have ordered them when you ordered the plane, it’s cheaper that way!”
President Donald Trump claimed Monday that Lockheed Martin cut $600 million off the cost of the F-35 fighter jet program that he has repeatedly slammed for cost overruns and delays.
Trump said it applied to the next 90 planes. The F-35 currently has a per-unit cost of about $100 million, which the company pledged to bring down even before Trump became involved.
There’s one indicator of a price-shuffle right there: “for the next 90 planes” pricing – that’s like those credit cards that advertise “low 2% APR (for the first 3 months)” and then, once you’ve run some debt up on them, it bungies back up to 20% or something ridiculous. It’s virtually impossible, by design, to tell what’s going on in procurement pricing, but my example of the seats may not be so funny – it would not be at all beyond the Pentagon to buy 90 aircraft at a special set price because they are literally unflyable but they’ll be made to fly later, at twice the price of the basic plane. If you do the thinking on that, you’ll realize that it’s the same pricing strategy as “buy a plane that doesn’t work now, and we’ll let you but a whole new plane that does, later!”
The F-35 was declared “combat ready” [dod]
JOINT BASE LANGLEY-EUSTIS, Va., Aug. 3, 2016
The F-35A Lightning II fifth-generation fighter aircraft was declared “combat ready” yesterday by Air Force Gen. Hawk Carlisle, commander of Air Combat Command.
That was following a successful deployment to Mountain Home Air Force Base, Idaho. Where it could be “combat ready” while the software to make it combat capable was still being developed. Got that? Now, today, the F-35 with its new Block 3F software build is capable of using all the weapons it was designed to use (including great big old school bombs that negate its stealth) By August 2017 I think it would be fair to say that the F-35 was starting to function. In order to make sure that the money-valve for the program remain in the full “on” position, though, it was important to get those F-35s deployed so they could drive around and fly around and pilots could practice with them. Presumably they yelled “PEW PEW PEW!” into their radios when they needed to do ‘combat’ stuff. [pm]
It gets more complicated because some of the earlier model F-35s may not be able to integrate the Block 3F software and the aircraft will need to be upgraded, at … (wait for it) nearly the cost of an aircraft. In case you ever wondered what the aircraft graveyard at Nellis AFB is full of: it’s full of ‘upgrade orphans’ from earlier programs that were deployed like this. In fairness, there is some rationale behind all this: it’s good to test and train on aircraft even if they are not “combat capable” – since you wind up with “combat ready” pilots and don’t have to field aircraft that the pilots don’t know how to fly. I’m willing to accept that some of this is justified and makes sense, but it’s one of the reasons why military weapons systems costs keep spiralling up and up. That, and the ridiculous profiteering and corruption.
If you were reading this blog back in 2016, I explained how procurement costs are manipulated by adjusting the quantity of units purchased for a fixed cost: “pay more, get less.” [stderr]
Oh, boy, right again.
Fortune magazine reports the Air Force party line, pretending that this is all how it’s done, kind of. [fortune]
The U.S. Air Force may have to cut its purchases of Lockheed Martin Corp.’s F-35 by a third if it can’t find ways to reduce operations and support costs by as much as 38 percent over a decade, according to an internal analysis.
The shortfall would force the service to subtract 590 of the fighter jets from the 1,763 it plans to order, the Air Force office charged with evaluating the F-35’s impact on operations and budgets, in an assessment obtained by Bloomberg News.
See what they did there? It’s exactly what I predicted in 2016: they’re going to pay the same amount of money for 1/3 fewer planes. Of course there are still going to be massive cost overruns but the per-plane cost still jumped 33%!
This, by the way, is part of why the F-22 – which, by most accounts is now a pretty sorted-out aircraft that effectively dominates any air-space it’s in – is being retired: there aren’t enough of them. Because, in order to keep boosting the cost, they bought fewer and fewer (for the same price) until now they only have a pathetic little squadron of planes.
If the Air Force pays the same amount, but gets 590 fewer aircraft for the price, and the cost per aircraft is $100 million, the Air Force just agreed to pay $59 billion dollars more, were they to buy the original number of aircraft. But, don’t worry – that number appears to have been inflated, already, to allow for the scalping: the original ‘buy’ of the program was for 4,900 aircraft. I know what you’re thinking. You’re thinking “wait, what the fuck? If that’s such an uber-aircraft, what do they intend to do with 4,900 of them!?”
Actually, those aircraft were never planned to exist. They ‘existed’ on the budget so that they could be ‘cut’ once there was no longer any need to pretend that the government would get a good price per aircraft because it was buying in bulk. They knew, all along, that this was going to happen.
Those that are not on the upgrade cycle will get parked to decay in the desert sun in Arizona. Those “combat ready” planes that “deployed” to Idaho: they’re going to end up here because it’d cost too much money to make them combat ready. That’s what those aircraft in the picture are:
“The long-term support concerns are on top of current F-35 challenges including parts shortages, unavailable aircraft and technical issues that must be resolved as the program ends its 17-year development phase. In September, the F-35 is to begin as much as a year of rigorous combat testing that’s required by law. Successful testing would trigger full-rate production, the most profitable phase for Lockheed, as soon as late 2019.”
It’s “combat ready”, remember but they still have to do “combat testing” before they start backing up great big dump trucks full of money outside of Lockheed’s headquarters.
What did you want? Teachers’ salaries? Single payer medical care? Public election funding? Mental hospitals? A national-level oversight agency to regulate city/state policing?
Upkeep costs for the F-35 are also a challenge for allies buying the plane, including the U.K., Australia and Italy.
Translating that from the original bullshit, they mean “the British, Italians and Australians are catching on that this is an overpriced plane that still is not combat ready, and may not buy it.” If that happens, then the per-unit plane cost is going to go right through the roof and the Air Force will announce that it’s going to pay the same amount and will accept fewer aircraft.
In a comment on an earlier post, Commentariat Propaganda Agent Crimson Clupeidae [stderr] suggested the movie Pentagon Wars [imdb], which is excellent and features a great performance by Kelsey Grammar. It describes some of the shenanigans around the procurement of the Bradley Fighting Vehicle (AKA “the fighting vehicle that is such a bad armored personnel carrier we can’t call it that, and such a bad tank we can’t call it that, either!”) What is scary is that some of the dodges that the corrupt manufacturers pull are exactly the sort of thing that actually happened. It is played for laughs but it’s basically a documentary.