Wednesday, October 15, 2014

F-35 Engine Cost

It’s always difficult to determine costs for various weapons and systems.  Here’s an example that appears to be relatively straightforward.  From a Defense News website article we see the costs for the next batch of F-35 engines (1).

“The cost of the modifications are included in the contract for LRIP 7, which was also awarded Tuesday. That award was for $592 million. When added to a previously awarded sustainment contract from last December, the total cost for LRIP 7 comes in at $943 million in funding for Pratt.

The lot covers 36 engines, as well as associated management and support.”

As I read this, the engine production cost is $592 for 36 engines which is $16.5M per copy.  The engine acquisition cost, including “management and support”, whatever that is, is $943M which is $26.2M per copy. 

Since you can’t, apparently, buy engines without “management and support”, the actual cost of an F-35 engine is $26.2M per copy.

No point to this post – just data.


(1) Defense News, “Pentagon, Pratt Cut Deal for F-35 Engines, Modifications”, Aaron Mehta, Oct. 15, 2014, 

18 comments:

  1. The one caveat to this is potential variability in the mgmt & support costs vs the number purchased and/or the lot #. It may very well be the percentage per engine is lower for a larger buy or a later, mature buy.

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    1. Ahhh ... the Siren Song of mythical serial production savings! Engines will cost a dollar apiece.

      No, I get what you're saying about the relative proportion of support costs and you could be right. On the other hand, this is LRIP-7 not LRIP-1. If this were LRIP-1 and we were paying for support mechanisms to be initially established, I might agree with you. But, it's not. Support mechanisms have been established. Management procedures (whatever that is!) are in place. It would appear that this relative degree of support is a constant.

      Regardless, I'm not going to speculate on what costs might someday be. These are the costs, here and now. This is the reality. They are what they are.

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    2. B.Smitty, see AJF's comment below. It seems to address your question about relative costs.

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  2. The F135 procurement cost equation is $592M + $88M = $680M. The $592M is what was awarded this week, and the $88M is money that was awarded earlier in an advance procurement contract. Divide by 36, and you get an average unit procurement cost of $18.9M. Compare to GE F414s that power the Super Hornet, which run about $4.5M each, times two, or $9M per aircraft. The sustainment contract awarded earlier adds $263M, or about $7.3M per aircraft, which gets you to ~$26.2M per. No wonder Pratt will "cover" the cost of modifications to F135 - we're already paying for them.

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  3. 'Other costs'
    A mate used to build aircraft engine transport cases.
    They were £40k a pop.
    Single use.

    But if you want to transport a million pound jet engine out to a stranded jet, and be sure it can be plugged in no fuss, its pocket change.

    Copies of service manuals, electronic diagnostic equipment, tool kits

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  4. I don't think we will ever have a true cost of this program, DoD has done a great job of making big announcements like LRIP price tag and then quietly proceeds to have these small contracts for tooling, paperwork, spares,manuals,etc...they seem small but add up to extra billions....

    They are going to make sure that the HEADLINE number gets all the coverage and looks like it is going DOWN when in truth, they are a lot of extra costs that don't get any attention or not added up to the total cost.

    By the way, we still haven't heard from LRIP-8 which is almost a year late and still no news on F35C carrier trials....

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  5. So … A few years back I was in the business of budgeting/funding the “sustainment” piece of JSF and it is based on Performance Based Logistics (PBL). Typical sustainment/repair is a pay as you go model, i.e./ repair and/or replace the engine, pay the associated cost. PBL is a pay up front cost and what you are buying are measures of performance. For instance, one metric may be … Let’s say there are a 100 JSF A/C to support, the Navy wants no airplane to be “unavailable” due to an engine problem. So, P&W develops a logistic supply chain / repair plan that delivers that performance. It is up to P&W to figure that out and deliver, the Navy is buying performance. In theory, the Lion’s share of any repair/replacement cost in included in the PBL, so there should be no out of pocket cost for the Navy. Because P&W has the entire negotiated fee upfront, the have control of the process and can develop means to best deliver “performance”. They also develop efficiency along the way and any associated savings is for them to keep. The Navy, and DoD, have done this on smaller scale projects, but JSF is by far the biggest endeavor to date. I am not sure the smaller, $5-10M projects are good indicators that if you scale this by orders of magnitude that the same model will work, and be cost effective for the Navy.

    So, in theory, majority of repair costs are covered, performance metrics are established and the KTR is held accountable to deliver performance; if it cost them more to deliver that performance, KTR’s problem and cost, if it cost less, KTR makes profit.

    AJF

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    1. AJF, thanks very much for that information! I had not heard that before. That suggests that every engine will come with a constant sustainment price added to the production. That would seem to address B.Smitty's hope that the relative portion of that would decrease over time - it appears to be a constant.

      It sounds like, basically, a paid lifetime warranty. You pay an upfront fee and then all repairs are covered for life.

      Thanks!

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    2. AJF, I have to say that in my humble opinion, the F-35 program will never reach its originally projected full-rate level of production. It will instead continue forward with a series of slowly expanding low-rate production blocks, producing F-35 airframes at horrific unit costs.

      IMHO, the way things are shaping up, we will also witness a situation in which previously constructed low-rate blocks of F-35s are sequentially retired much earlier than originally planned.

      This will happen because those earlier LRIP blocks will either be judged deficient in design and construction relative to extant combat performance requirements at the time of their early retirement; or else because they are otherwise judged to be unsuitable for combat action due to advances in emerging IADS and A2/AD threats where previous blocks are evaluated as being too expensive for upgrade or modification considering the relative seriousness of the emerging threats.

      The latest problem with the F-35's engine with the fan blades rubbing excessively against the internal air control shroud are a good example of why I hold this opinion.

      My own guess about what is wrong with the F-35's engine is that highly optimistic assumptions were made early on in the program concerning the structural rigidity of the F-35 airframe and its ability to minimize the buildup of distortion-inducing forces acting on the engine assembly during flight maneuvers.

      The engine includes an internal low-clearance air control shroud which minimizes the loss of airflow around the fan blades, thus improving the performance of the engine. Excessive distortion of the engine assembly during flight maneuvers causes excessive rubbing of the fan blades against the shroud, eventually resulting in their premature failure.

      My speculation is that solving the fan blade rubbing problem in the absence of doing a fundamental redesign of the F-35 airframe's internal structure will involve a combination of a relaxed shroud clearance specification, plus an upgrade to the engine assembly's overall ability to resist excessive distortional forces emanating from the airframe.

      These changes will reduce the F-35's engine performance and will add more weight to the airplane, thus reducing the aircraft's theoretical combat performance, all other things being equal.

      Based on the fact that full-rate production for the F-35 is now seven years late compared to the original 1996 program plan of 2007 for FRP, it is easy to speculate that we have not seen the last of these kinds of issues with F-35 LRIP aircraft. These problems go with the territory when attempting to load this much combat capability into this small of an airframe.

      Given that the F-35 program is immune from cancellation regardless of its actual cost and schedule performance, this kind of situation could go on for another thirty years or more.

      I am not being sarcastic here, it is what I honestly expect will happen.

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    3. Glad to help ... Paid lifetime warranty, not exactly. Those costs are negotiated annual costs, based on what one would expect to pay for the sustainment of the engines. So, you can look at like an installment plan for the warranty. An installment plan based on historical costs and expected failure rates. Best interests of the Navy are taken into account, and it does hold the KTR accountable.

      Time will tell if a PBL of this magnitude will be cost effective.

      AJF

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    4. Scott, that's one of the best comments I've seen in some time - insightful and logical. Also, disturbing! Thanks for the contribution!

      You and AJF have offered some great information and food for thought.

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    5. AJF, will the Navy's F-35 engines be treated the same way? I can see the manf establishing supply locations and tech support at major AF bases. Is it practical to do the same aboard carriers?

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    6. CNO ... Interesting article that speaks to PBL, worth a read.

      http://insidedefense.com/Inside-the-Pentagon/Inside-the-Pentagon-10/16/2014/industry-dod-missing-out-on-win-win-situation-that-could-save-billions/menu-id-80.html

      AJF

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    7. AJF, the article you linked to appears to be behind a subscriber firewall so I can't see it. Was there a particular aspect you wanted to call to my attention?

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  6. ComNavOps ... I am not an expert in the logistical engine supply chain, but I think you have it right. Limited onboard repair capability, with land based supply locations and tech support as required. This is not any different than existing support for other carrier based aircraft. Basically, certain repairs can be done and/or a limited amount of engine rebuild, if that capability is exceeded, then a new engine is installed, and damaged engine is transported off board for repairs. This is part of that PBL strategy, KTRs responsibility to make sure enough Ready For Installation (RFI) engines are available.

    AJF

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  7. Not bad really... considering the low volumes. The Boeing 777's GE90 engine is about $16 million by itself, about $24 million with a maintenance contract. That is a mass produced engine with over 2000 engines delivered.

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  8. wait am i reading it right ? 2 engines of a hornet is still cheaper than a single F35 engine ? is this price gouging by the engine manufacturer ?

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    1. The F-35's engine is a low volume engine at this point, and the highly ambitious performance objectives expected from this engine make it a comparatively spendy proposition by definition, regardless of how many are being procured..

      We would have been much better off with using a two-engine airframe as the conceptual starting point for developing a common USAF/USN strike-optimized fighter, leaving the USMC to decide for itself whether it was worth it to develop their own single-engine STOVL fighter for their own needs.

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