July 29, 2014

How Much Does an F-35 Actually Cost?

F-35 Image from the U.S. Air Force

The F-35 is not just the most expensive warplane ever, it's the most expensive weapons program ever. But to find out exactly how much a single F-35 costs, we analyzed the newest and most authoritative data.

Here's how much we're paying.

A single Air Force F-35A costs a whopping 8 million. One Marine Corps F-35B costs an unbelievable 1 million. A lone Navy F-35C costs a mind-boggling 7 million. Average the three models together, and a "generic" F-35 costs 8 million.

It gets worse. These are just the production costs. Additional expenses for research, development, test and evaluation are not included. The dollars are 2015 dollars. This data was just released by the Senate Appropriations Committee in its report for the Pentagon's 2015 appropriations bill.

Except for the possibility that the F-35 Joint Program Office might complain that the F-35A number might be a little too low, these numbers are about as complete, accurate and authoritative as they can be.

Moreover, each of the other defense committees on Capitol Hill agree or-with one exception-think each model will be more expensive. The Pentagon's numbers for these unit costs-in every case-are higher.

The methodology for calculating these F-35 unit costs is straightforward. Both the president's budget and each of four congressional defense committees publish the amounts to be authorized or appropriated for each model of the F-35, including the number of aircraft to be bought.

The rest is simple arithmetic: Divide the total dollars for each model by the quantity.

Purchase price

There are just two things F-35 watchers need to be careful about.

First, it's necessary to add the funding from the previous year's appropriation act to the procurement money the government allocated for 2015. This is "advance procurement" for 2015 spending, and pays for "long lead" components that take longer to acquire.

Second, we have to add the cost of Navy and Air Force modifications.

For the F-35, these costs are for fixing mistakes already found in the testing process. With the aircraft still in its initial testing, the modification costs to existing aircraft are very low. But the 2015 amounts for modifications are surrogates for what the costs for this year's buy might be. If anything, this number can be an under-estimate.

The Senate Appropriations Committee sent its report to the printer on July 17, and that data is informed by the latest advice from the Pentagon, which is routinely consulted for the data the committee is working with. The Pentagon is also given an opportunity to appeal to change both data and recommendations.

Accordingly, of the four congressional defense committees, the Senate Appropriations Committee numbers are the most up to date. For the most part, these numbers are also the lowest.

The data from all four defense committees, the Pentagon's budget request, and the final 2014 appropriations-all for the F-35 program-are in the table at the end of this article. This data is the empirical, real-world costs to buy, but not to test or develop, an F-35 in 2015.

They should be understood to be the actual purchase price for 2015-what the Pentagon will have to pay to have an operative F-35.

It's very simple, and it's also not what program advocates want you to think.

In a briefing delivered to reporters on June 9, F-35 developer Lockheed still advertised the cost of airplanes sans engines. Highly respected Aviation Week reported on July 22 that taxpayers put up million for each F-35A in 2013.

In reality, we actually paid 8 million.

Some of these numbers are for the airframe only. In other cases, you get a "flyaway" cost. But in fact, those airplanes are incapable of operative flight. They lack the specialized tools, simulators, logistics computers-and much, much more-to make the airplane useable. They even lack the fuel to fly away.

Rising costs

Here's another curious fact. The unit costs of the Marines' short-takeoff, vertical-landing B-model and the Navy's aircraft-carrier-capable C-model are growing.

The cost of an F-35B grew from 2 million in 2014 to a bulging 1 million by 2015. The cost of the Navy's F35C grew from 3 million in 2014 to a wallet-busting 7 million by 2015.

The quantity numbers for the F-35B have not changed, remaining at six per year. The number of F-35Cs to be produced has slipped from four to two, but surely learning processes on the F-35 line have not been going so far backward as to explain a 23 percent, million per unit cost increase.

Something else is going on.

That something just might be in the F-35A line. Note the 15 percent decline in the F-35 unit price from 2014: from 4 million to 8 million. The units produced increase from 19 to 26, which Bogdan repeatedly explained will bring cost reductions due to "economy of scale."

However, is that what's really occurring in the F-35A line, while F-35B and F-35C costs are ballooning? Should not some of the benefit in F-35A production efficiency also show up on the F-35B and F-35C? Lockheed builds all three on the same assembly line in Fort Worth.

It could be that the F-35B and F-35C are bearing the overheard-or other costs-of the F-35A.

Why else would an F-35B with a stable production rate increase by million per unit, and how else could the cost to build an F-35C-in production for six years-increase by million per unit?

Even those who reject that someone might be cooking the books to make F-35A costs look as good as possible to Congress-and all-important foreign buyers-there should be a consensus that the program needs a comprehensive, fully independent audit.

Surely, an audit will help Congress and Pentagon leadership better understand why F-35B and F-35C prices are going up when they were supposed to be going down-and to ensure there is nothing untoward going on in any part of the program.

The defense world is full of price scams, each of them engineered to come up with the right answer for whoever is doing the talking.

Next time an advocate tells you what the current unit cost is for a program, ask: "What is Congress appropriating for them this year?" And, "How many are we buying?" Then get out your calculator. The result might surprise you.

The aforementioned mentioned table follows:

This article was originally posted at War is Boring.