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Three Reports on the F-35: One of Them Informative

 
Report Cover of Department of Defense; Systems Engineering Report

A few days ago, Breaking Defense reported an $11.5 billion cost decrease in the F-35.  The outlet proclaimed "This is no program estimate that critics might savage. This comes from the Government Accountability Office's definitive annual Assessment of Selected Weapons Report [sic.]."  Breaking Defense also quoted GAO's report (titled "Defense Acquisitions: Assessment of Selected Weapon Programs") that the newly discovered reduction in costs was "due solely to efficiencies found within the program as no decrease in quantities was reported." (See pages 11-12 of the GAO report.)

It all fit in nicely with the ongoing advocate narrative on the F-35: costs are coming down; yes, software and a few other things are a problem, but despite a few bumps in the road, the program is headed in the right direction, especially on cost. 

The news of cost reductions, validated by GAO, was surely welcome in the face of GAO's other report, detailing some of those software issues. They threaten to force a delay in the Marine Corps' plan to declare the F-35B "initially operationally capable" in 2015 and the Air Force's plan to do the same in 2016, or to require them to declare IOC with even less capability than had been originally-and very modestly--planned. 

There's just one thing wrong with the new cost reduction report, reported in the opening sentence of Breaking Defense's report as a "major win" that was "just scored" by the F-35 program.  As GAO explained in detail in the 10 page explanation of its methodology (on pages 149 to 159), its analysis compared the DOD Selected Acquisition Reports (SARs) that came out in early 2013 (dated December 2012) to the previous SAR that was issued in 2012 (dated December 2011).  Or as GAO put it "We compared the programs that issued SARs in December 2012 with the list of programs that had issued SARs in December 2011." 

In that more than year old SAR (dated December 2012), DOD reported that it had declared total F-35 costs to be lower than estimated in the previous SAR (dated December 2011): costs had come down by $10.8 billion in 2012 dollars, which translates to $11.5 billion in GAO's conversion to 2014  dollars.

And that's your savings, reported by Breaking Defense as something new.

Note also, this is not "GAO's F-35 Estimate" (as proclaimed in Breaking Defense's headline: "GAO's F-35 Estimate Plunges $11.5 Billion; EELV Costs Soar $28.1 Billion"), it is GAO's regurgitation of what DOD reported in its past F-35 SARs, comparing the 2012 numbers to the 2011 numbers. 

Moreover, take a look at the reasons for the lesser costs in the newer (2012) SAR, described by GAO as "due solely to efficiencies found within the program."  Those "efficiencies" are variously listed on pages 77 - 81 of the December 2012 SAR; they include subcontractor re-estimates of costs, revised (more favorable) inflation estimates, redefinition of customer (DOD) requirements, and realignment of where to charge costs.  Rejiggering inflation numbers, lesser hardware requirements, and unverified subcontractor numbers are what GAO characterizes as "efficiencies."  Let's be polite and describe GAO's characterization as incomplete.

Note also that what we are getting is subcontractor and other numbers reported by DOD (with or without independent verification), re-reported by GAO (apparently without any verification or analysis, none of which appeared in the report). And finally, all of it misinterpreted to us by Breaking Defense.

Meanwhile there is more informative reporting on the F-35, mostly uncovered by the media, except for the revealing work of Jason Sherman at InsideDefense.com.  (Behind a paywall, the article is available on request.)  Sherman summarized most of a new annual report from DOD's Deputy Assistant Secretary of Defense (DASD) for Systems Engineering, Stephen P. Welby.  His March 2014 "Systems Engineering Annual Report" confirms some of the bad news we have already heard from other DOD testing reports, and the report implies some important contradictions to GAO's prognosis of declining F-35 costs and that there is anything approaching new "efficiencies" that can be understood to justify an estimate of lower cost being in hand.  The bad news comes in four categories: Performance, Reliability, Software and Manufacturing, as follows:

  • The F-35 is hiccupping on one of its Key Performance Parameters (KPPs).  It happens to be one that many ignore but which is integral to the aircraft's ability to engage in combat.  The issue is the F-35's "sortie generation rate," or how often it can fly in either combat or-very important-training.  In addition, there are problems in other KPPs where DOD has already relaxed the standard, and there are numerous "non-KPP" thresholds where the F-35 is having problems.  DASD Welby puts it as follows:  

o   "Performance: The program is on track to meet seven of the eight KPPs. An issue with incorrect analysis/assumptions is hampering the attainment of the sortie generation rate (SGR) KPP. The program office is examining the sensitivity of the SGR KPP to establish more operationally realistic ground rules and assumptions. As a result, the program plans to reassess SGR. Although on track, the combat radius, STOVL performance, and CV recovery KPPs have limited margins. During a requirements review this year, the program determined of 62 non-KPP ORD thresholds, 16 are not achievable by the end of SDD based on the current plan, and eight others are at risk of not achieving the threshold. The program identified corrective actions or has way-ahead recommendations."

  • In addition and as we already know from previous test reporting, the F-35 is not meeting its interim standards for reliability.  Note that as DASD Welby states, this can mean more, not less, cost.  As Welby puts it -

o   "Reliability: Reliability data are below growth curves for all variants, and the program could face a risk to meeting reliability requirements without dedicated funding for a reliability growth program. Similarly, since O&S costs are based on meeting the required reliability at maturity, there are increasing risks to O&S cost and future aircraft availability. The program does not plan to complete prognostics portion of the Prognostics Health Management (PHM) requirements within SDD."

  • We know from a different GAO report, which goes more seriously into the issue at hand than the GAO report discussed above, that the F-35 is having serious problems with its all-important software.  Note that Welby projects an actual delay in the Marines' and Air Force's IOC plans, while GAO only asserted the possibility of it (which F-35 program manager Lt. General Bogdan tried to minimize to as little as 30 days).  Welby says -

o   "Software: Software delivery for the remainder of Blocks 2/3 is a challenge because of the size and complexity (~28.9 million software lines of code (SLOC), with ~2 million SLOC remaining). DASD(SE) forecasts a schedule delay for Block 2 and a delay for Block 3. As a result, the program improved software processes but also shifted resources to Block 2 at the expense of Block 3."

  • DASD Welby's findings on manufacturing "efficiencies" are hardly grist for a declaration that cost reductions are in hand.  While he cites "progress," his caveats are so serious as to question whether the direction of cost estimates should be up, rather than down-at least until there is a proven, empirical basis for declaring any savings whatsoever.  Nonetheless, both DOD and GAO find the basis for a rosy future.  More wary, Welby states -

o   "Manufacturing: There was steady manufacturing progress in FY 2013, but quality, scrap/rework/repair, on-time part delivery, supplier execution, and reduced funding for future affordability initiatives are issues that may have an impact on costs for LRIP ramp-rate increases and FRP. In addition, there are production risks including part-interchangeability variation and fix schedule, outer-mold-line control, and maturing international capabilities. DASD(SE) participated in two supplier reviews and the annual prime contractor PRR. There was improvement from the previous year, but there are risks remaining for all eight manufacturing areas assessed. Mitigation plans are in place or in development for all production issues, risks, and PRR findings."

Sometimes, reports serve only the purpose of informing us what the advocates happen to be pushing and who or what they have enlisted in their efforts.  Having worked at GAO for nine years and witnessing all too close the mentality of some senior management there, it does not surprise me that GAO's-shall we say--incomplete descriptions of DOD's numbers have the effect of enabling the advocates and their mouthpieces.

We should thank InsideDefense.com for bringing the Systems Engineering Annual Report to our attention.  Needless to say, we can ignore the rest.

Winslow Wheeler, Director, Straus Military Reform Project, Center for Defense Information at the Project On Government Oversight

By: Winslow Wheeler
Director, Straus Military Reform Project, CDI at POGO, POGO

Mr. Wheeler's areas of expertise include Congress, the Defense Budget, National Security, Pentagon Reform and Weapons Systems

The goal of the Straus Military Reform Project is to secure far more effective military forces and much more ethical and professional military and civilian leadership at significantly lower budget levels.

We would like to thank Philip A. Straus Jr. and family for their generous support.

Submitted by ilsm at: May 22, 2014
M&S, Without the weapon/sensor fusion software and all the off F-35 fusion resources needed the SGR is meaningless. Sortie generation rate is a function of reliability and time to do repairs, refuel, rearm and PMCS (preventive maintenance, checks and servicings, maybe reconfigure). It is for the Fulda Gap scenario, which is why USAf wants 1400 F-35's when the sortie is 60 minutes running loads of armaments on moving brigades. Currently, a 10 hour mission would bring the F-35 back with a "code 3" and it won't fly again until thething is fixed. If it don't abort at 1.4 hours. Think ruinous SGR and abyssmal mission reliability in contexct of all the things needed to make F-35 any different than A-10!
Submitted by M&S at: April 4, 2014
I find it ridiculous to claim that there are 'sortie generation rate' issues on a jet which is designed to fly 1400nm unrefueled at an average of Mach .75. Jets that were doing that during OEF were running on the order of 12-15hr missions from a carrier -with- target area refueling from tankers in Kyrgyzstan and an S-3 strike/recovery push from 'somewhere over Pakistan'. Yet these USN jets were averaging only 20 minutes over the Northern Kabul target areas before the VC-10s arrived and only 40 minutes after assured heavy-AAR support was available. 'Sortie Generation' under these (typical, given the range) conditions thus becomes a function of how many hours your flight-idle thrust setting transit between base, target and back contains. And due to simple physics, it's frankly very unlikely that these jets will get in more than a single sortie per flying day. ARE YOU TELLING ME that the JSF cannot fly _once_ per day when the standard for 'surge' in 1991 was at least three and in testing the A-10 at Bicycle Lake in the 70s they were putting in 15-20? Of course, what am I saying? You can't know what you don't know until you own the TDP and last I heard General Bogden was 'working with LM's lawyers on that'. LM, who are likely swimming in red ink, watching the Italians drop 40 jets and the Koreans only promise 30 back while the Japanese look to indefinite down-the-road kick on their 42 or whatever it is, until prices stabilize. And so, desperate to maintain as big a padded margin on O&S costs as they can to get profit on the backend, LM is about as likely to let go of that TDP as a drowning man his life preserver. And all this while nobody dares ask for a sanity check on what Michael O'Hanlon suggested in what, 2001? That, with weapons like Brimstone (X6), SDB (X8) and APKWS (X14), we _don't need_ to have a 2,400 airframe inventory of manned fighters. At most, to win the First Night Of War DEAD condition, we only need maybe 500. Forget sortie rates, at this point, short of honest figures on CPFH and MMH:FH, we cannot begin to judge whether 1.45 trillion is a real figure or just the point where LM starts to really cook the books but we know that 400 billion to get to the end of SDD/EMD is. And we know that the original development was supposed to be somewhere around 220 billion. Which means this thing is Nunn McCurdy'd at least three times before being 'rebaselined'. And short of a Defense Secretary who -can- show this nation's defense has an irrefutable need for this jet, let me point out why it does not. With digital SSLs (Northrop Grumman Gamma Firestrike) coming online in 100KW rated terminal systems by 2022 and 1MW stacked 'slabs' likely following before 2030, the future of airpower is going to be about missiles vs. lasers and super vs. hypersonic defense penetration as time critical targeting. Why waste 3-5hrs, each way, if you can send a hypersonic bullet the same distance down range, in less than 15 minutes? Why risk -hours- of flight over random engagement DEWS threats when an eyeblink kill 10 seconds before weapon's release is as deadly as one which destroys you 10 minutes after fence in? It is that kind of fundamental paradigm swing that is going to start happening when the F-35 is less than ten years into a forty year life cycle. Given the blatant falsehood of 11.5 billion in phantom program savings efficiencies _because of the unknowable unknown_ of the support contracting, it looks like time to cut our losses and pull a 'for convenience of government' exit from this disaster. Even if it costs the full 400 billion SDD/EMD contract fee to keep LM out of bankruptcy, it will be worth it for the chance to make a major shift away from subsonic, sub-1,000nm, sup-par, tacair. And begin to instead move towards missile systems which we can buy at a 27:1 (that's 5 million each for an X-51 based system) equivalency for each F-35. Missiles which do not have to train, and so can be replenished at war-depletion need rather than by arbitrary dictat of a base inventory number we will never use. We fired 100 Blk.IV Tomahawks at 800,000 dollars each during Odyssey Dawn. Quintuple that with a 300 weapon reserve (800 select aimpoints) and you still have only 4 billion in yearly acquisition goals for a 5 million dollar hypersonic followon: _if you shoot every one of them_. Comparatively, the USN/USMC will each have to put up 10-12 billion, PER YEAR, for a decade and the USAF a further 16 billion to have JSF's whose cost of ownership is that of training pilots in the 90% of peacetime conditions where they aren't actively needed. Do I need to remind anyone that the most called for CAS asset for troops in the field during both OEF/OIF was the lowly MQ-1 predator because it could stay on station for 32hrs on a 1,000lbs of fuel? THAT is how you fight and win wars, once there are no more SA-21 Growlers to worry about.

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