For the record, they have not conducted a tender with binding offers or technical details, just took a few weeks to look at the alternatives before continuing to spend on jsf.
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2.7 Constraints of the Comparative Analysis Process
There are a number of inherent constraints in the CA process, which are presented below:
• The NL MoD has less detailed knowledge about Advanced F-16 and Gripen NG than
about F-35. The MoD has been a partner in the multi-national development
programme for the F-35 since 2002. As a consequence, it is inevitable that the
MoD has a much greater level of knowledge and understanding about the
capabilities, risks and opportunities of the F-35 aircraft than about either the
Advanced F-16 or the Gripen NG aircraft.
22

• The CA was based on non-binding information. The questionnaire submitted to
manufacturers did not request contractually-binding information, nor did the NL
MoD have the opportunity to negotiate alternative terms with the manufacturers.
Consequently, the MoD had to validate the information, which complicated the
assessment process.
• There was a limited period of time available for the CA. The time available was
constrained by the requirement to make a timely decision on the procurement of
test aircraft in the F-35 development programme. The time period was further
reduced by the late addition of the Gripen NG and a delay in receiving complete
data from the manufacturers. Consequently, there was little time contingency
available for the CA team and limited flexibility for unforeseen tasks.
• There was significant uncertainty over some of the data available for the CA. All three
candidates are in some phase of development, which presented constraints
regarding the certainty of some information and challenges in validation.
Confidence in data is typically correlated to the maturity of the development
phase.
• The CA only assessed quality, cost and delivery timeline. In accordance with the
coalition agreement, there are a number of other factors which, although likely to
be considered in a final decision on F-16 replacement, were explicitly excluded
from the CA. Those considerations may include environmental factors, foreign
relations, and broader political concerns. An assessment of potential industrial
factors is being conducted by the Ministry of Economic Affairs.
• The CA assessed each of the three aspects discretely. In accordance with the coalition
agreement the CA was explicitly directed to consider quality, cost and delivery
timeline. It did not consider all opportunities to trade between these three aspects.
• Withdrawal of Rafale/Eurofighter. As shared in the 17 July 2008 Letter to
Parliament, Rafale (Dassault) and Eurofighter Typhoon (Eurofighter) declined to
participate in the CA, limiting the number of candidates to be compared.
23

There is nothing new or unusual here. Use of simulations and pricing models based on how you use your existing airplanes is a time honored way of performing evaluation of competing bids. An example of adding costs to a bidder’s bid happened as recently as the KC-X competition where USAF added costs to Boeing’s B767 tanker causing the A330 tanker to win the contract.

Of course there’s plenty of new and unusual here that is relevant to the actual thread title. It’s not a aerial tanker we’re discussing.

You don’t think the aircraft being simulated should have been used with all their relevant system and weapons data in order to evalutate its operational capability and if it would meet the requirements under various threat models?

The price issue is even more absurd.

Another pair of slides.

Saab comments on Norwegian evaluation

Simulations with incomplete data
Price comparisons with inadequate assumptions

http://www.saabgroup.com/en/MediaRelations/News/2008/saab_comments_on_norwegian_evalution.htm

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Dont forget that LM posts f-35 prices in 2002 dollars.

The FY08 budget otoh;

The two-stick has enhanced capability than the single-seater in the ISTAR, EW and C2 role and the lack of a gun on a few 39Ds is not an issue for most airforces especially if you fly many other jets with a gun.

Thailand also plan to buy more in the future so it might not be the dominant number but the fact is Sweden is for instance training Thai weapon system operators for back seat capability such as electronic attack and you could imagine scenarioes when Erieye, a couple of Gripens and some F-16s fly missions together. The low signature Gripens and Erieye do the information superiority and electronic attack while F-16 pilots do what they have been doing for many years.

Czechs and Hungary only use 2 twin-seaters and 12 single seaters. Sweden got about the same proportions but this will change to become 75 C and 25 D.

South Africa is to get 9 twins and 17 single, that is a bit high but they HAD a (now less likely but I suppose some of them still dream…) plan to get additional Gripens and the added jets would mainly be single seaters.

Instead of focusing the question on Thailands high proportion you could just as well look at the low proportion in the Czech, Hungary or Sweden…

For the record, India has never said if they will buy the Indian ‘PAK-FA’ or when. They might prefer to wait for a certain degree of system maturity before ordering any serious amount of jets with money spent elsewhere such as on lca mk2. The SU-30MKI will be in production 8-10 more yrs at least and has a regional edge for a long time as well.

So what is needed is not to rush the production of pakfa but to now get squadron strenghts up by inducting mass produced preferably cheap jets and that was a big task destined for the LCA. The jets also don’t need to be superduper awesome or heavy.

The only logical way forward is to go in parallel and focus on Improved Tejas and to continue with mmrca, should one fail for any number of reasons (politics/tech) the other program must be able to scale up in production and help fill up divisions. No more delays should be accepted.

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Norway’s JSF Price Tag is $3.2 Billion and Rising

(Source: defense-aerospace.com; published Dec. XX, 2008)

PARIS — Norway did not obtain a firm price from Lockheed Martin for the Joint Strike Fighter, and the price it was quoted will change substantially before the contract is signed in 2014, Norwegian government and industry officials say.

Price information provided by these officials paints a quite different picture from that provided by initial media reports, and illustrates many apparent inconsistencies.

For example, the $2.57 billion figure widely quoted as the cost of the 48 aircraft is wrong because it is based on the wrong exchange rate. Maj. Jarle Ramskjaer, head of information for the Norway’s Project Future Combat Aircraft Capability office, told defense-aerospace.com Dec. 2 that Lockheed Martin’s price is based on January 2008 exchange rate.

Using this rate (5.5 Norwegian kroner to the dollar), the JSF’s 18 billion kroner cost works out to $3.27 billion, or $68.12 million per aircraft, substantially higher than the $54 million (wrongly based on Nov. 2008 exchange rates) unit price that was widely reported.

Asked to clarify how Norway had computed the JSF price, Ramskjaer said in a Dec. 5 e-mail that “Conversion between NOK and USD is somewhat more complex than multiplying with the exchange rate. The net present value is then derivated as follows: First, we periodize expenses according to the payment plan and adjust for the escalation indices. Then we create a “currency future” based on the money marked interest rates in the two currencies, as advised by the Norwegian Ministry of Finance. Those “currency futures” are then used for each period, converting foreign currencies to NOK. Last, we discount with a factor to get real time yearly cost.”

Additionally, Norway has calculated that the life-cycle cost for 48 JSF will total 145 billion Norwegian kroner (or $26.3 billion at January 2008 exchange rates) over 30 years, Ramskjaer said. This is also substantially higher than previously reported.

The $3.27 billion price tag is also incomplete. It covers “48 fly-away aircraft (Unit Recurring Flyaway, or URF, price) including Alternate Mission Equipment (AME) but not weapons or spares,” Ramskjaer said. In addition, the agreement with Lockheed Martin includes “an escalation clause to update the price at the delivery of the aircraft (when payments are due). We have based our estimates on historical development of the indices, and future predictions”, he added.

“Cost information provided to Norway in response to a Request for Binding information in April 2008 was a ‘budgetary estimate’ in 2008 US dollars,” Lockheed JSF spokesman John Kent said in a Dec. 4 e-mail. The cost “includes aircraft Unit Recurring Fly-away cost plus Ancillary Mission Equipment, e.g., fuel tanks, weapon pylons, safety pins, weapons racks, etc.”

When these factors are added to the basic price, Norway will end up paying substantially more for its 48 JSFs. And, as the price is quoted in dollars, currency fluctuations over the next six years will substantially affect the final price.

“We do not understand how the Norwegians came to the figures that they presented,” Lasse Jansson, a spokesman for Gripen International, said in a Dec. 5 e-mail. He added that officials from Gripen parent company Saab AB and the Swedish Defence Matériel Agency, FMV, had been debriefed by Norwegian officials on Dec. 4, and that “we are now trying to sort out if what we got out of that meeting made things [any] clearer to us.”

Norway has made provisions for other cost variations, such as “future growth (material and labor) indices, currency terms, net present value of the future investment etc, all which has been calculated according to Ministry of Finance directions,” Ramskjaer said.

Given these uncertainties regarding prices, and the fact that the contract will not be signed until 2014, Norwegian JSF price figures are pretty meaningless. It is thus difficult to understand how Norway’s Parliament can usefully debate the proposed JSF acquisition during the debate it has scheduled for Dec. 19.

Other prospective JSF customers are no better informed regarding JSF prices. Asked whether he was “any clearer about the unit cost of a Joint Strike Fighter” than during a previous hearing in January 2008, General Sir Kevin O’Donoghue, Britain’s Chief of Defence Materiel, told the House of Commons Defence Committee on November 25, 2008 that “No, I do not think I am, am I?”

Another apparent inconsistency is that Norway’s basic $68.12 million unit price tag is substantially lower than the price the US Air Force expects to pay for the F-35s it plans to order in FY 2013, one year before Norway expects to sign its contract.

According to USAF FY2009 budget documents (page 43), the US Air Force’s 48 F-35s planned for FY2013 will cost $4.336 billion, or $90.3 million per aircraft.

When advance procurement costs ($468.8 million) and initial spares ($372.7 million) are added, the USAF’s total bill for the 48 aircraft increases to $ 5.177 billion, or $107.8 million per aircraft, about 57% more than the URF price offered to Norway.

Ramskjaer declined to comment on the price differential with the USAF order, but said that “on a general basis we can say that the learning curve could have an effect on the acquisition cost (low rate initial production vs. mass production). It all depends when the aircraft is ordered, and which block/batch they will [originate] from.” Lockheed’s John Kent referred questions on this subject to the US government JSF program Office.

Thus, contractual price information will not be refined until the contract is signed in 2014, and many factors can change substantially over those six years. Ramskjaer says, for example, that Norway did not receive, nor did it expect, a firm price at this stage, and that contractual prices, escalation clauses and penalty clauses for late delivery “will be addressed in the contract.”

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