Audit Reports Rising Cost, Deferred Capability of Australian F-35A Aircraft

(Source: Australian Strategic Policy Institute; posted Dec. 19, 2019)

So, what’s the new news? The key worrying piece is that the F-35 project is under funding pressure.

The [Major Projects Report, MPR] states that, ‘In September and November 2018, due to cost pressures, the Joint Strike Fighter project received government approval to transfer project scope of $1.5 billion to other phases of the Joint Strike Fighter program (none of which have been approved by government). There was no corresponding transfer of funds out of the project budget’ (page 26).

Since the approved budget for the project is $16.5 billion, this means that 9% of the project scope has been moved off into some undefined point in the future, but Defence is hanging onto 100% of the budget to acquire the remaining 91%.

It would seem fair to classify this as effectively a $1.5 billion real cost increase since the capability Defence is getting is costing more.

This brings the total of real cost increases to $3.3 billion.

What’s more, the report states that, ‘Some level of known cost risk remains with a possibility that further scope transfers may be required’ (page 135). So, more content may get pushed down the track.

The capability question is, what’s in the 9% that has been moved? And how important is it?

That’s a little harder to determine. One element is the ‘beyond line of sight’ communication system (page 148). Since one of the key selling points of the JSF was its networked capability, this would seem to be a problem.

Overall, there’s enough evidence in the MPR to indicate that, while the F-35 is still on track to achieve initial operational capability by the end of 2020, Defence doesn’t have a plan to get all of the elements required for final operational capability, scheduled for late 2023.

And then there’s the issue of the JSF sustainment system.
earlier this year on the immaturity of the system. The MPR confirms that. Moreover, it states outright, ‘The F-35 future sustainment affordability has been affected by an increase in through-life sustainment cost estimates.’

With an F-35 flying hour already costing twice as much (page 63) as the classic Hornet it’s replacing, that’s some more bad news. (end of excerpt)

Click here for the full story, on the ASPI website.


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