The Pentagon continues its tradition of misleading on F-35 costs: this time, defense undersecretary Ellen Lord and F-35 Program Executive Officer Gen. Eric Fick appear to have ‘overlooked’ $7 billion when announcing the latest deal. (DoD photo)
These figures were repeated during an Oct. 29 press conference by Ellen M. Lord, the undersecretary of defense for acquisition and sustainment, and incoming F-35 Program Executive Officer Lt. Gen. Eric T. Fick, who told reporters “the $34 billion agreement for F-35 low-rate initial production lots 12 through 14 includes the delivery of 478 F-35 aircraft.”
But even a cursory glance at these figures shows they cannot be right.
If the Pentagon was really paying $34 billion for the 478 aircraft, as Lord said, the average cost of each would be $71.1 million ($34,000,000,000 / 478 = $71.12 million).
Yet, basic arithmetic shows that the Pentagon will pay an average of $94.35 million for these 478 aircraft, for a total of $41.052 billion.
This figure is based on an infographic (see at top) released Oct. 29 by F-35 prime contractor Lockheed Martin detailing the number of aircraft by variant and by production lot, as well as the agreed unit price – its Unit Recurring Fly-away (URF) cost.
We then calculated below the average cost for each variant over the three production lots, and then multiplied it by the number of aircraft in each lot.
The result is that, instead of $34 billion, the 478 aircraft the Pentagon plans to buy in Lots 12-14 will actually cost $41.052 billion – or about 20% more claimed by Lord.
Lockheed says ‘final prices’ are much higher
But Lockheed Martin itself, in a separate table issued as part of the same Oct. 29 press release, implies that the costs announced by the Pentagon are wrong.
In a footnote to the table, it says that “Final prices for F-35 variants following adjustments for Congressional plus-ups and other contractual settlements are as follows: F-35A - $89.3M; F-35B – $115.5M; and $108.8M” for the F-35C (see below).
So, if Lockheed’s ‘final prices’ are so much higher, how can the Pentagon claim that unit costs are much lower and dropping? And the differences are big enough to be noticed:
-- $89.3 million instead of $77.9 million for the F-35A variant (+$11.4 million);
-- $115.5 million instead of $101.3 million for the F-35B (+$14.2 million), and
-- $108.8 million instead of $94.4 million for the F-35C ($14.4 million).
And these figures are just based on Unit Recurring Fly-away (URF costs), which only include airframe and engine. When everything that is needed to actually fly and operate the aircraft is included, the real unit cost of the F-35 increases even more.
As reported Oct. 31 by the Project On Government Oversight, “The Pentagon’s own budget documents list the FY 2020 procurement cost for those 48 [US Air Force F-35A] aircraft as more than $101 million, nearly $12 million more than the figure rolled out” by Lord.
“Using the Navy’s charts and the same math shows that the real costs for each F-35C is more than $123 million, while each F-35B costs in excess of $166 million. But even that figure doesn’t tell the whole story.”
Substantial extra costs are unavoidable
All F-35s already delivered and paid for must undergo upgrades and fixes to bring them up to contractual standards, while the Block 4 upgrade -- which will, by 2023 at the earliest, finally provide a fully-capable airplane -- will cost at least another $10 billion to develop – or at least another $4 million per aircraft.
Finally, all of the more than 900 aircraft delivered before Block 4 begins coming off the production line (440+ already delivered, plus the 478 to be delivered in Lots 12-14) will require upgrading to Block 4 standard – at a cost of several more million dollars each.
That does not include the cost of the F-35’s eighteen-year full-scale development, from 2001 to this summer. POGO reports that “The latest publicly available figures show that taxpayers will have spent approximately $55.5 billion for F-35 research and development.
If the Pentagon purchases all 2,470 F-35s in the current plan, the true cost of each aircraft goes up by nearly $22.5 million,” which means the real, all-inclusive costs are:
-- over $123.5 million for the F-35A;
-- over $188.5 million for the F-35B, and
-- over $145.5 million for the F-35C.
By the time all costs are added up – R&D, production to Block 3F standard, upgrade to Block 4 – the Pentagon will have paid well over $150 million for an F-35A, and nearly $200 million for each F-35B, with the F-35C somewhere in-between. Foreign operators will pay slightly less, as the share of R&D costs paid by each varies.
This is about twice as much as the Pentagon and Lockheed Martin announced on Oct. 29.
More unexplained claims
While media attention was distracted by the cost reduction claims, Ellen Lord slipped in two other surprising statements that went largely unnoticed during her press conference.
“With respect to on-time delivery, we have ….a 96% on-time delivery rate, a tremendous improvement from where we were last year, with an average on-time delivery rate of 64%,” Lord told reporters.
No explanation was sought, and none provided, as to how a 50% increase in on-time deliveries was possible at a time when, as the Government Accountability Office has reported, fleet availability is severely limited by insufficient production of spare parts.
The second unexplained improvement claimed by Lord is that “DOD combat-coded operational unit mission capability performance increased from 55% in October 2018 to 73% in September 2019,” another near-50% improvement in less than a year, again offered – and again accepted – without explanation.
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