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Air Force's Slower F-35 Buy Rate Spurs Nearly $30B Cost Hike

The total acquisition cost of the F-35 Joint Strike Fighter program is estimated to rise by $27.5 billion over the course of the fifth-generation jet's production, according to recently disclosed figures.

According to the 2016 Selected Acquisition Report, published in December and delivered to lawmakers Monday, the total cost projection for the Defense Department's most expensive acquisition program shot up from $379 billion in 2015 to $406.5 billion in 2016 -- a 7 percent increase.

One reason? The Air Force doesn't plan to buy so many of the aircraft so soon.

The service -- which will buy the more F-35s than the Navy and Marine Corps -- decreased its annual buy rate and thus extended the program, causing a shift in procurement costs, among other effects, said Rear Adm. Mat Winter, the program executive officer for the F-35 Joint Program Office.

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"The U.S. Air Force reduced its maximum annual rate of aircraft procured from 80 per year down to 60 per year, which extended the planned purchases by six additional years from Fiscal Year (FY) 38 to FY44," he said in an email statement.

 

Winter said the quantity reduction, in tandem with the six-year extension, drove an increase in costs. For one, the total program cost -- including the F-35's operations and sustainment added to the acquisition costs -- is now estimated to increase by $27.5 billion in inflation-adjusted dollars.

It also caused a slight uptick in the F-35A's average cost per plane over the course of the program, or Unit Recurring Flyaway Cost. The A model increased from $100.6 million in inflation-adjusted dollars in 2015 to $111.3 million in 2016, according to the report.

On Tuesday, the head of Air Combat Command, Gen. Mike Holmes, said he would prefer an increased buy rate of the Lockheed Martin-made F-35 -- but it's not a budget reality.

"We really should be buying 80 or 100," Holmes told the audience at an Air Force Association breakfast in Washington, D.C. He said an increased buy rate of even "150 fighters a year" would help offset the average service age -- 27 years old -- of jets currently in the inventory.

"But in the world I'm in, with the budget I have, I'd like to get to 60," he said.   

Winter said the program "remains within all cost, schedule and performance thresholds and continues to make steady progress," and the JPO is "committed to the delivery of cost-effective warfighting capability." 

Meanwhile, the Marine Corps plans to add 13 F-35Bs, the short-takeoff-and-vertical landing version of the Lightning II, bumping the F-35 jet buy total to 2,456 from 2,443.

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