Recent reports state that Lockheed Martin are willing to put a fixed price limit on the F35. Indications are that it will be about US$60 million or so BUT we need to note the caveats:
- This is for Low Rate Initial Production 4 (LRIP 4) aircraft, not an aircraft that matches the final production specification
- It’s based on the assumption that a very large number of aircraft will be produced (more than anyone’s currently talking about ordering)
- The US$60 million is for the Conventional Take Off & Landing (CTOL) version of the F35, as opposed to the carrier based version or the Short Take Off, Vertical Landing (STOVL) version that’s to replace the Harrier. This isn’t such a big deal for Australia though as we’re going for the CTOL F35A and officially not looking at the other variants.
The mainstream media are reporting on LM’s fixed price offer and some are even pointing out a few of the caveats listed above (especially the more aviation focused groups). The big issue I’ve not seen being discussed though relates to capability. Some are touching on it, but we need to have this asked in the headlines of the mainstream media and have real answers provided:
How much will it cost to bring these aircraft up to the advertised “full functionality” F35?
Lockheed Martin have sold everyone on the amazing capabilities of the F35 and on paper it looks great, although some concerns have been raised about its ability to deal with modern Russian/Chinese aircraft & tactics. Regardless, the sizzle of the F35 that’s being sold by Lockheed Martin is certainly a wonderful machine and the F35 cockpit simulator I spent some time with at Avalon 2009 had me drooling for sure.
So what’s the difference between the LRIP 4 F35 and the “all the bells & whistles” version that everyone’s using to paint a picture of the glorious future Australian air defence environment?
Is the gap between LRIP 4 and “fully effective & worth the money” like a car advert where headline price quoted is for the base model that doesn’t have stereo, air conditioning or power mirrors? You know, the bits that make the car great but their absence will not stop it being a very functional & economical unit that meets 80-90% of your driving needs.
Or, is it like the similar version of this advert that has the little asterisk next to the price and wwwaaayyyy down the bottom (in very fine print) a note relating to “on-road costs not included”? You know, the dealer fees, registration, etc. Those last few essential items that you really have to have in order to get the damned thing into your name and out of the show room. It’s still a great car that will meet 80-90% of your needs, but now there’s an extra 5-10% added onto the price before you can actually make good use of it.
Or is it even worse? Is the LRIP 4 F35 like buying a car that has the wrong type of wheels or has clunky steering. You know, it does most things OK but only if it’s not raining and if you really try to drive it how you want, it’s going to break or can’t go over 60km/h, etc. In other words, something that doesn’t match what’s being sold and doesn’t meet even 50% of your requirements without extensive upgrades & further costs required.
Until the capability gap information is made available, we cannot determine whether Lockheed Martin’s fixed price offer is a good thing or not. We also need to find out if there are other caveats related to flexibility in missing deadlines and milestones, such that LRIP 4 winds up delivering even less capability than may currently be planned.
Does a publically accessible roadmap showing capabilities across the various LRIP and production versions exist? Will “we the people” ever know exactly what our politicians and bureaucrats are signing our tax funds up for?
My fear is that all of this information will, of course, be classified and that Australia will sign on for the US$60 million per aircraft price at great fanfare so the government can say “See, we’re saving you money!” Then we wind up having to pay an additional $20-$40 million per aircraft over a number of years to bring them up to a level where they can actually do 80% of what is being promised. Of course, this will come out of the operational expenses account as opposed to a capital expenditure account and will be a problem for some other government long after the current lot have retired.
Sadly, my gut feel is that this scenario is very likely to occur…