JPO Obtains ‘Lower F-35 Costs’ By Lowering Its Own Projections
(Source: compiled by Defense-Aerospace.com; posted March 29, 2016)
F-35 Joint Strike Fighter – Acquisition costs (RDT&E + Procurement + MILCON) for the overall program decreased $12.1B from $391.1B to $379.0B (TY$). The breakdown by subprogram is:

F-35 Aircraft – Subprogram costs decreased $5.7 billion (-1.8%) from $324.1 billion to $318.4 billion, due primarily to revised estimates for initial spares requirements to include the maturation of the technical baseline, definition of customer requirements, and further definition of service bed-down/fielding plans (-$4.3 billion).

Also, there were revised estimates for lower economic inflation rates(-$1.8 billion) and additional reductions due to revised estimate assumptions for block buy and multi-year procurement (-$2.6 billion).

These decreases were partially offset by increases due to additional scope/engineering for aircraft procurement changes for enhanced additional capabilities (+$1.8 billion).

F-35 Engine – Subprogram costs decreased $6.4 billion (-9.5%) from $67.0 billion to $60.6 billion, due primarily to revised estimates based on actual costs from low rate initial production lots (-$2.9 billion), revised estimates based on revised assumptions about multi-year and block buy procurement options (-$1.0 billion), and additional decreases resulting from revised estimates for initial spares requirements to include the maturation of the technical baseline, definition of customer requirements, and further definition of service bed down/fielding plans (-$1.9 billion).


(EDITOR’S NOTE: As is the case every year, the Joint Program Office revises downwards its estimate of the F-35 acquisition costs, and this is translated in the annual Selected Acquisition Report as an actual reduction in costs.
Yet, these revisions are based on estimates, that is to say on the JPO’s evaluation that costs will be lower than previously estimated.
For example, it sufficed for the JPO to decree that initial spare parts holdings will be lower than previously to obtain a $5.7 billion cost reduction. A further $4.3 billion is “saved” by estimating that bed-down and fielding costs will be lower than planned, but again with no assurance this will in fact be the case.
Consequently, JPO has simply moved the goal-posts, and massaged its previous estimates, to claim that F-35 program costs had declined by $12.1 billion in a single year.)



Click here for the March 24 Pentagon statement on the SAR.

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