Defense Technology International - May 2008 - (Page 23)

UPDATE MAJOR PROGRAMS BILL SWEETMAN LOCKHEED MARTIN The ﬁrst Joint Strike Fighter has cleared initial inﬂight refueling tests, paving the way for a move to Edwards AFB. JSF SAVINGS EMERGE—0.3% If stealth technology can make the F-35 Joint Strike Fighter as hard to track as its budgets, it will be invulnerable. When the Defense Dept. released the 2007 Selected Acquisition Report (SAR) numbers on the JSF project in April, media outlets variously reported that the program’s costs were up, down or stable. The projected program cost did decline by $940 million, from $299.82 billion to $298.88 billion. But the cost of the entire project is so vast that the reduction was only around 0.3%. Because the SAR covers the total projected cost of development and procurement, it includes macroeconomic projections out to 2034. Given the uncertainty of 20-year forecasts, the reports that costs were stable were justiﬁable. The small shift is the sum of two large changes: $11 billion in increases, offset by $12 billion in savings. System development and demonstration (SDD) cost is up by $6.6 billion, of which $2.8 billion is attributable to added costs in propulsion, due to problems with the Pratt & Whitney F135 engine, which has suffered from low-pressure turbine failures and increased cost with the lift fan. Another $3.8 billion goes to building prototypes (though two were canceled). These increases imply a 15% jump in SDD. They are also based on the assumption that the General Electric/Rolls-Royce F136 alternate engine will be scrapped, which is planned in the 2008 budget but will be reversed by Congress. AviationWeek.com/dti The savings are in procurement and support. They include $7.5 billion in support costs and lowered estimates for labor, materials and escalation. Some represent the clawing-back of increases in prior-year SARs, and some are attributable to good management. Procurement numbers are important to non-U.S. customers, which base their long-term budget planning on predicted procurement costs. The Dutch defense ministry, for instance, DEPARTMENT HIGHLIGHTS assured the parliament in TECHNOLOGY ACQUISITION April that the acquisition of MAJOR PROGRAMS UPDATE is a new department that 85 JSFs will cost €5.667 billion reports on the latest developments in global procurement in 2005 values ($9.7 billion in programs and related technologies. The ﬁrst two updates cover aspects of the Joint Strike Fighter and Future Combat 2008) based on a 2008-value Systems (p. 24). Coming issues will include updates on ﬂyaway cost of $56 million. programs for land, sea, air and space systems. Feedback However, $9.15 billion in is welcome: editor@deftechintl.com. JSF money has been shifted from support to non-recurring procurement costs. (Most of this Analysis Improvement Group, the Dehas to do with bringing low-rate ini- fense Contracts Management Agency tial production airplanes to the initial and NavAir. The three responded with service standard, and installing state- estimates of SDD overruns ranging from of-the-art electronic components to $4.9-13 billion, and delays from 12-27 replace pieces which, by then, will be months. However, the known SDD inobsolete.) Without that switch, support creases—$10 billion including the 2007 costs would have been up and non-re- SAR report and the F136—are actually curring procurement costs would have in the mid-range of GAO estimates. The GAO notes that the SDD effort was been down. What emerges, therefore, is that savings, which are projected to cut back to save money: two test aircraft offset the increases in SDD, are in non- were deleted in September 2007, and since late 2005 the number of planned recurring procurement. So far, those savings have not been flight tests has been cut to 5,147 from identified, and are in the future. SDD 7,000. Program officials say they expect increases are based on experience be- future tests to be more productive. ■ MAY 2008 DEFENSE TECHNOLOGY INTERNATIONAL 23 cause the SDD program is past its halfway mark. The SAR follows a gloomier view of the JSF program presented by the Government Accountability Office (GAO). The JSF program office was dismissive of the GAO, and the GAO’s analysts admitted that they had to rely on last year’s SAR. Rather than make their own estimate of changes in SDD budgets and schedules, they asked other government agencies for their projections: the Pentagon’s Cost http://AviationWeek.com/dti

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Defense Technology International - May 2008 Contents Around the World Science Watch Tech Watch Learn and Live Think Again Vive la Difference En Route Out of the Box Package Deal On Watch Inside Job Programs Update The Net Back to the Future Busy Signal Mighty Mites Hull of an Idea Tough Enough Cutting Edge First Person In Review Insight

Defense Technology International - May 2008

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