WASHINGTON — The Pentagon's projected total cost for buying the F-35 shot up by $27.5 billion from 2015 to 2016, a spike mostly driven by slower-than-expected U.S. Air Force procurement, the program office announced.
According to the 2016 Selected Acquisition Report, or SAR, which was delivered to congressional lawmakers Monday, the estimated total acquisition cost of the F-35 program increased to $406.5 billion in then-year dollars that include inflation, up about 7 percent from last year's estimate of $379 billion.
Critics can blame the augmented costs on the Air Force's annual buy rate, which dropped from a planned maximum rate of 80 aircraft to a paltry 60 units per year. The Marine Corps added 13 F-35Bs to its planned program of record, but was unable to offset the increases driven by changes to the Air Force's funding profile.
The lower Air Force buy rate had a number of other effects to the F-35 program as a whole, Rear Adm. Mat Winter, the F-35 program executive officer, said in an emailed statement.
First, it will take the service six additional years to complete procuring its planned program of record, currently specified as 1,763 F-35A conventional takeoff and landing models.
The total program cost also increased by $27.5 billion in then-year dollars. According to the Joint Program Office, the total program cost is the fighter's operations and sustainment added to acquisition costs, which includes expenses incurred from F-35 development, procurement and military construction.
That figure now sits at $1.53 trillion, up from $1.50 trillion in last year's SAR.
Finally, it led to a "slight" increase in the cost per plane. For example, unit-recurring flyaway costs — which measure the average cost per plane over the life of the program — are currently estimated at $111.3 million per F-35A. The 2015 SAR put an "A" model at $100.6 million in then-year dollars.
Air Force officials have said the service's smaller maximum buy rate is the reflection of fiscal realities, not its need for the F-35. At an Air Force Association event Tuesday morning, Air Combat Command head Gen. Mike Holmes reiterated the service's plans to ramp up to 60 aircraft a year; although without congressional intervention it will procure only 46 A models in fiscal 2018.
"Sixty is what we think is financially attainable in the best-case world. We really should be buying 80 or 100, and if I was going to fix the average life of ACC's aircraft, I'd like to buy about 150 fighters a year and about 20 or 25 [remotely piloted aircraft]. If I was going to buy the average service life down, that's what it would take," he said. "But in the world I'm in, with the budget I've had, I'd like to get to 60."
The 2016 SAR documented a number of other changes to the F-35 program's estimated costs. Research, development, test and evaluation expenses "have remained steady" for the most part, Winter said. However, a reallocation of funding from procurement to RDT&E was necessary to wrap up the program’s development phase. That contributed to a slight hike from $55.1 billion in 2015 to $55.5 in the 2016 SAR.
The total estimated cost of military construction associated with the F-35 program stayed exactly the same from 2015 to 2016, at $4.8 billion in then-year dollars.
The program office noted that unit-recurring flyaway costs of the F-35B actually decreased when measured in base year 2012 dollars, which the JPO uses to show an apples-to-apples comparison without factoring in annual inflationary increases. In then-year dollars, "B" variants increased slightly from $122.9 million to $123.4 million per copy. When charted in base year 2012 dollars, the price dropped from $104.4 million to $103.7 million because of a larger Marine Corps program of record.
Meanwhile, the Navy’s carrier-launched F-35C also increased slightly, from $110.7 million to $112.4 million.
Projected operations and sustainment, or O&S, costs increased by $35.3 billion due to the rising cost of fuel and changes to the F-35 bed-down plan, the JPO said. The program office currently estimates total O&S costs at $1.06 trillion in then-year dollars.
"Without these two updates, the F-35 estimated O&S costs would have decreased by approximately $6.2B (base year 2012 dollars) from last year's JPO estimate," Winter said.
Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.
