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What is the Real Price of F-35?

What is the Real Price of F-35? November 5, 2019

The news that the F-35A price tag will be lower than 80 million USD was a piece of sensational news. It meant that a government could decide to acquire either F-16 or F-35 as the price difference was almost less than 20 million USD per copy.  Project On Government Oversight (POGO) has a different perspective on the price tag. According to the nonpartisan independent watchdog that investigates and exposes overpriced military spending Pentagon is trying to deceive by obscuring F100 Million+ Price Tag for F-35s.

According to POGO, Pentagon ‘forgot’ $7 billion when announcing last week that it would buy 478 F-35s for $34 billion.  

Pentagon claims that they have negotiated an agreement with Lockheed Martin in order to drive down the unit cost of the F-35 joint strike fighter to below $80 million in the next few years.

According to POGO, however, publicly available Pentagon budget documents show the real cost of the F-35 to be above $100 million per copy for the fiscal year 2020 buy. Given the work that remains, and the way the Pentagon has surrendered many key responsibilities to the manufacturer, the price is likely to be at least that amount or higher for the foreseeable future.

The most commonly mentioned figure is for the F-35A, the Air Force’s conventional take-off variant and the least expensive model. The current estimate for the lot of aircraft currently in production is $89.2 million apiece. This figure is the unit recurring flyaway cost—the price tag for just the aircraft and engine, which by themselves do not make a fully functioning weapon system.

That $89.2 million does not include procurement funds spent on initial spare parts, flight training simulators, ALIS support system, and more, all unique to the F-35.

The Air Force’s fiscal year 2020 budget pays for the 48 F-35As in Lot 11. The current $89.2-million-dollar price the Pentagon uses is calculated by separating out just the costs for the airframe and the engine from the larger total procurement cost that includes ALIS, simulators, initial spare parts, and more to get to the artificially low $89.2 million. That is far from the whole story.

The Pentagon’s own budget documents list the FY 2020 procurement cost for those 48 aircraft as more than $101 million, nearly $12 million more than the figure rolled out for press reports. Using the Navy’s charts and the same math shows that the real costs for each F-35C are more than $123 million, while each F-35B costs in excess of $166 million.

None of this factors in the research and development costs of the program. Ellen Lord, the Pentagon’s acquisition chief, announced on October 29 that the program needs more money to complete the developmental and testing phase of the program. The latest publicly available figures show that there is approximately $55.5 billion to spend on F-35 research and development. If the Pentagon purchases all 2,470 F-35s in the current plan, the true cost of each aircraft goes up by nearly $22.5 million.

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