Norway Defense Plan Reveals Hidden Costs of F-35 Procurement

A fascinating snippet from the Norwegian Defence Procurement 2017–25 document:

“F-35 Upgrade. The purpose of the project is to increase the operational capability of the Armed Forces to perform offensive and defensive air operations. In order to achieve this goal upgrade of the F-35 Combat Fighter is needed. Update/upgrade the F-35 Combat Fighter according to the vendors upgrade programme adjusted to national/NATO ambition level.
Cost: NOK7–9-billion”

To be clear: this is spending on top and above that for the planned NOK-81-billion spend on buying 52 F-35As (UPC: $182-million), and it is needed to get them to the standard that will allow them to meet their operational requirements.

Wow! At face value, that means that Norway is having to spend up to 11% more – $1.05-billion – on making sure that the F-35A works as expected.(Emphasis added—Ed.) OK, it might be as little as an extra 9% – $820-million – but even so ....

This data might include extra costs of integration of the Naval Strike Missile into/onto the F-35A (you can bet your cotton socks that despite the 85–100% mission systems commonality between all three variants, there is going to be no way that integration onto the F-35A will provide Grandfather Rights onto the other variants!).

But wasn’t the key aspect of Norway’s “membership” of the F-35 that NSM would be integrated? Wasn’t this the key thing that Oslo wanted out of the whole programme?

And as such, that wish would mainly come, as a cost, under Norway’s SDD/PSFD spend – which is happening today, and not in 2022–25, when the Norwegian “F-35 Upgrade” money is ear-marked for.

To back this view up, a press release from Kongsberg, manufacturers of NSM from April:

“Kongsberg Defence Systems (Kongsberg) has entered into a contract with the Australian Department of Defence worth 150 MNOK for integration of a new capability in the Joint Strike Missile (JSM).”

-- NOK150 million = $17.5-million
-- This is a long way from $1.05-billion ....

However, as Norway has ordered F-35As, and as Australia has ordered F-35As, why there is an integration cost at all is a question to ask ....

Defence Analysis will now extrapolate this data – and the quality of the Norwegian publication is simply excellent – across to the UK ...:

• At best, the UK’s JSF budget 2017-25 is £2.6–2.8-billion.
• At worst, the UK’s JSF budget 2017-25 is £1.9–2-billion.
• The first figure would buy (under UK accounting rules) some 25-28 F-35Bs, the latter figure 18–20.
• However, if the UK were to have to find, like Norway, an extra £175–310-million, then this cuts two to four aircraft of the planned offtake to 2025. Let’s be honest: there is very little likelihood of the Treasury or someone in the MoD coughing up this cash, or finding it down the back of a sofa ....

Conclusion:

If this is, indeed, a cash issue about to hit the UK, then instead of the 48 JSFs delivered by 2025, it would be as few as 44, or 14 by 2020, when the carriers are meant to become operational.

(EDITOR’S NOTE: While this analysis only directly applies to the United Kingdom, it is clear that all F-35 buyers will face the same add-on costs to allow the aircraft to perform the way it should.
These costs are never included in the unit costs circulated by Lockheed Martin and the Joint Program Office, but an increase of 10% or thereabouts is not negligible.)

-ends-

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Norway Defense Plan Reveals Hidden Costs of F-35 Procurement Norway Defense Plan Reveals Hidden Costs of F-35 Procurement Reviewed by Defense Alert on 04:58:00 Rating: 5

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