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Analyst: F-35C to Cost $337 Million Apiece in FY15

A longtime defense analyst and critic of the F-35 Joint Strike Fighter program says taxpayers next year will pay between $148 million and $337 million per jet, depending on the model.

Winslow Wheeler, a staff member at the Project On Government Oversight who has worked on national-security issues for the Senate and the Government Accountability Office, detailed his cost estimates for the Lockheed Martin Corp.-made fifth-generation stealth fighter in a recent article on Medium.com.

Wheeler puts the per-plane production price tag at $148 million for the Air Force's F-35A, which can take off and land on conventional runways; $251 million for the Marine Corps' F-35B, which can fly like a plane and hover and land like a helicopter; and $337 million for the Navy's F-35C, which can take off and land on aircraft carriers. The average cost for all three variants is $178 million, he wrote.

"This data is the empirical, real-world costs to buy, but not to test or develop, an F-35 in 2015," he wrote. "They should be understood to be the actual purchase price for 2015—what the Pentagon will have to pay to have an operative F-35."

Wheeler derived the estimates using recent figures from the Senate Appropriations Committee. The figures don't include research and development costs, but do include funding from the previous year's appropriations act for "advance procurement" and from aircraft modifications.

Wheeler rejects the use of an aircraft's so-called flyaway cost to describe its true expense because, he wrote, "those airplanes are incapable of operative flight. They lack the specialized tools, simulators, logistics computers -- and much, much more -- to make the airplane usable. They even lack the fuel to fly away."

Michael Rein, a spokesman for Bethesda, Maryland-based Lockheed's F-35 program, didn't immediately return an e-mail seeking comment to the article.

Joe DellaVedova, a spokesman for the Pentagon's F-35 program office, disputed Wheeler's estimates, saying they're misleading and don't reflect what the department contracts for the planes.

Under the most recent production contract with Lockheed, the department in 2013 agreed to pay $112 million per F-35A, $139 million per F-35B and $130 million per F-35C, DellaVedova said. Those figures, known as unit recurring flyaway costs, include the airframe, engine, mission systems, profit and concurrency, he said.

The government has also shifted from bearing all the financial risk in the program to sharing it with Lockheed and Pratt & Whitney, which makes the F135 engine for the single-engine fighter, DellaVedova said in an e-mail. The contractors now cover 100 percent of any cost overruns and 50 percent of concurrency costs, he said.

"Affordability is the No. 1 priority for the F-35 program," he said. "You can have the best airplane in the world, but if nobody can afford it, it does you no good. We are doing all we can to drive prices down and we are making a difference."

Kevin Brancato, a senior defense analyst at Bloomberg Government, said in an e-mail that Wheeler's estimates appear to be correct, but emphasized that the vast majority of the differences between the unit cost of the variants in fiscal 2015 is due to spreading nonrecurring and support costs over fewer aircraft.

Nonrecurring costs include production tooling, money for buying out parts that will be difficult to source later and money for cost-reduction initiatives, while support costs pay for engineering related to production, he said.

"The Navy's C variant will be far more expensive in FY15 than the other variants because the Navy will pay $170 million in nonrecurring costs and $247 million in support costs while buying only two aircraft," Brancato said. "That's $416 million in total, or $208 million per jet, before the cost of airframes, electronics and engines.

"In contrast, the nonrecurring and support costs are $78 million for each Marine Corps B variant, and just $37 million for each Air Force A variant," he said. "For fiscal 2015, the Marines requested six jets and the Air Force requested 26."

Meanwhile, recurring unit production costs -- the airframes, electronics and engines -- will continue to decline for the F-35A and F-35B, Brancato said. For the F-35C, the number being built will drop to two from four, which will drive up the cost of the airframe, yet the cost of the electronics and engines will still go down, he said.

The Joint Strike Fighter is the Pentagon's most expensive weapons acquisition program, estimated to cost a total of $398.6 billion for a total of 2,457 aircraft. That breaks down to a per-plane cost of $162 million, including research and development.

The Pentagon in its budget for fiscal 2015, which begins Oct. 1, requested $8.3 billion for 34 of the aircraft, including 26 F-35As, 6 F-35Bs and 2 F-35Cs. The House Appropriations Committee voted to buy an additional four aircraft, for a total of 38, while the Senate panel agreed with the Pentagon's request -- a difference that will have to be resolved in conference negotiations.

The fighter jet missed its highly hyped international debut in the United Kingdom earlier this month. It was scheduled to appear for the first time at three events in the U.K., culminating with a flight demonstration at the Farnborough International Air Show outside London. But the aircraft was a no-show after an engine fire in one of the planes resulted in a fleet-wide grounding and subsequent flight restrictions.

(Story was updated to include quotes from F-35 program office spokesman.)

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