Reality of F-35 production cost

A couple of recent articles by Loren B. Thompson, Ph.D. concerning the reality of the F-35 production cost.

The F-35 Will Cost About What An F-16 Costs
Tuesday, April 13, 2010
http://www.lexingtoninstitute.org/the-f-35-will-cost-about-what-an-f-16-costs?a=1&c=1129

Govt. Negotiators Seek Price On Next Lot Of F-35s Far Below Official Cost Estimates
Friday, April 16, 2010
http://www.lexingtoninstitute.org/govt-negotiators-seek-price-on-next-lot-of-f-35s-far-below-official-cost-estimates

Feel free to discuss anything Dr. Thompson says in either of these two articles but I have just a few comments.

First a correction/disagreement with Dr. Thompson… The unit recurring flyaway cost of the F/A-18E/F is near $60 million but the only F-16s near that are the UAE Block 60 with new Block 50/52 being notably lower (as would the Blcok 60 if procured in larger numbers).

From April 13, 2010 article.
1. The estimates are based on historical data from the F/A-18 and F-22 programs.
2. The prices the military actually is being charged for the F-35 are far below such estimates.
3. The estimates are based upon assumptions about the future that are unknowable and untestable.
From April April 16, 2010 article.
Government representatives negotiating terms for a fourth production lot of F-35 joint strike fighters are pressing prime contractor Lockheed Martin to deliver the most common variant of the plane at a price far below the level predicted in official cost estimates recently provided to Congress. Lockheed’s initial proposal was substantially below the amount predicted by those estimates, but the response of the government was to request a price well below even the contractor’s proposal. Contract negotiations are still under way, but it is increasingly clear that the price charged to the government for what is called Low Rate Initial Production Lot 4 will be far, far below the official cost estimates sent to Congress.

The low price for the next lot fits a pattern seen in all three previous production contracts: the contractor has consistently charged the government much less per plane than Pentagon estimates said it would. In fact, the prices charged weren’t just below the projections contained in the recent 2009 Selected Acquisition Report, they were below the more modest estimates contained in a previous 2007 Pentagon report. The reason for the disparity between what the government predicted and what it was actually charged is that contractor prices are derived from real F-35 program costs, whereas government estimates are extrapolated from the records of other fighter development programs (mainly the F-22 Raptor and F/A-18 Super Hornet).
…
The decision of government negotiators to seek a price for the next production lot far below the Pentagon’s official cost estimates suggests that policymakers have little faith in the methodology used to generate those estimates. Pentagon estimators say that the cost of each F-35 has risen 60-90% since the program began, but the price being sought by government negotiators tracks more closely to the 34% cost growth claimed by the contractor. The 2009 Selected Acquisition Report stated that the program is meeting all of its performance goals without incurring significant engineering or quality problems, so there is no obvious reason why costs would be rising rapidly. But with program performance and price negotiations unfolding at cost levels so much lower than official estimates, it isn’t so clear what constructive purpose those estimates are serving.

Thank you Dr. Thompson for the reality of how ridiculous all these numbers being thown out there lately are.

Now go ahead & keep on spinning all you disengenous/intellectualy dishonest naysayers but there is no reason to believe the recent Pentagon numbers when the actual cost of the 1st three LRIP lots (& the cost being negotiated for LRIP lot 4) is below even 2007 projections.