02 August 2008

So Not Shocking...JFS Cost Skyrockets

The cost of the JSF for Australia has apparently $AUS75 million to $AUS131 Million* (the Australian dollar is about $0.95 US).

It's still cheaper than the F-22, which law forbids them to get anyway, which clocks in at an eye-popping $355 million (US).*

I think that a number of nations will start considering alternatives, either US (F-15, F-16, F-18E/F) or foreign (Typhoon, Rafale, Gripen,Flanker Family), when the full cost is made known.

Additionally, I think that for non-US (and non-UK) forces the support costs may be higher because their own militaries will not be able to maintain some of the systems, as they will not be given sufficient information on the aircraft's highly integrated avionics.

But wait, there's more!!!!

Lockheed is looking to change the accounting structure in order to generate a sh$#load more costs:
The JPO currently bills each of the three major F-35 contractors separately. This unique arrangement is designed partly to limit the amount of overhead feeds charged by each of the contractors, which can amount to hundreds of millions of dollars over time.

Lockheed's proposal, however, would bundle all of the industry team's charges into a single billing process for submitting to the JPO for payment.

Each charge submitted by BAE and Northrop would include a discrete fee to cover their own overhead costs. Lockheed would then add its own overhead for the aggregated bill. Since Lockheed would be charging an overhead fee on top of fees already charged by BAE and Northrop, the JPO would be paying a "fee on a fee", Wood says.

She adds that the JPO estimates the current structure has saved $850 million already, so making a change for the full-rate production phase could dramatically increase the programme's overall costs.
So if you read anyone who says they have a handle of the actual cost of the F-35, don't believe them.

*There are a number of ways to price aircraft, and I believe that both are total program cost divided by number of aircraft. I've heard quotes at about 1/2 as much for the F-22.

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