The web-based encyclopedia Wikipedia has its detractors: Political controversies remain controversial behind the curtain, and articles about the arcane or esoteric tend to be populated by niche enthusiasts. For all that, the Wikipedia editors make a sincere attempt to present information fairly and accurately.
For example, in the sometimes confusing arena of military aircraft procurement costs, Wikipedia’s standards are clear and sensible:
Wikipedia editors should strive to only use the basic unit flyaway cost (FAC) or unit procurement/program cost (UPC) in their articles and identify which they are using.
Agenda-driven political opponents of aircraft programs typically roll RDT&E costs, spares, tools and even MILCON into their unit cost calculations as a way to inflate – often grotesquely – the marginal cost of a single aircraft. Unit procurement costs are far the more accurate measure, since sunken, up-front costs may eventually be spread over more airframes in the future as additional aircraft are purchased, as is happening right now with the FA-18E/F Super Hornet
Time magazine feels no compunction about generally accepted accounting standards however, as revealed in their photo essay “Top 10 Most Expensive Military Planes.” Hard times call for informed decisions, but this is nothing but your standard, reflexively anti-military hit piece.
The table below compares Time‘s cost per aircraft against Wikipedia’s usage (for the most part) with the unit overage in the right most column. Since the P-8A program is still in LRIP and foreign military sales are still in negotiation, unit costs are squishier and had to be derived elsewhere. And while the House Armed Services Committee has indeed restored VH-71 funding as Time asserts, those dollars are unlikely to be approved in conference with the Senate, nor signed into law by the president. Using Time‘s methodology of total program cost divided by the number of aircraft fielded therefore, the unit cost for the VH-71 would be infinite, the editors having granted themselves permission to divide by zero.
| Cost (millions) | ||||||
| Aircraft | Time | Wikipedia* | Difference | |||
| FA-18A-C | $94 | $29 | $65 | |||
| FA-18E-F | $94 | $57 | $37 | |||
| EA-18G | $102 | $66 | $36 | |||
| V-22 | $118 | $68 | $50 | |||
| F-35 | $122 | $83 | $39 | |||
| E-2D | $232 | $204 | $28 | |||
| VH-71 | $241 | Canceled | ||||
| P-8A | $290 | $277 | $13 | |||
| C-17A | $328 | $218 | $110 | |||
| F-22 | $350 | $137.50 | $213 | |||
| B-2 | $2,400 | $737 | $1,663 | |||
Citizens reading about FA-18C aircraft costing $94 million per copy – Time doesn’t bother to break out the legacy Hornet from the more expensive (more capable) Rhino – would rightfully be outraged. Instead they ought to be angered at such a slanted essay from what pretends to be a news and analysis journal. From the editors’ perspective, I suppose it takes the heat off the trillion dollar health care reform proposals now circulating in Washington.
For reference, the still developmental Boeing 787 is expected to cost between $150-200 million dollars per copy, while the Airbus A 380 is expected to cost between $317-337 million dollars per airframe.
Aircraft, as someone who has spent far too much time mooning over Mooneys and Huskeys at controller.com could tell you, ain’t cheap.
I haven’t bothered to pick up a copy of Time since the mid 70′s when I finally realized the internal biases they held to all things outside of their own little reality.
I think the case is less bias than trying to report the actual costs to taxpayers. The govt. loves to play accounting games that would result in jail time for civilian firms.
Please help me understand: What’s the best bottom-line per unit way of reporting ALL costs to taxpayers of a new plane? Don’t you HAVE to include at least first-year costs of spare parts, special tools, whatever? Wouldn’t not including them be like ads for products that list a price, then hit you with tons of hidden “handling fees” and taxes. All you care about is the FULL amount you’ll have to pay, right?
“sunken, up-front costs may eventually be spread over more airframes in the future” — Key word here is “may.” Shouldn’t the story say, “They will initially cost XXX per plane, but prices may drop if more planes are ordered.”
And as you note with Wikipedia, the story should include the source of the figures and how the reporter arrived at a per-unit cost. Then readers can decide if he or his sources have a clue.
No, George, it IS bias.
The best way to discuss the cost of a program is to completely separate RDT&E from production cost.
One number is the price to design and test the system – to get it to the point where you can issue it to the Fleet. This number is fixed. It will be the same whether you buy one or one million operational units.
The second number is the production cost. This number can be sliced several ways, depending on whether or not you include spare parts. Either way, it is a per-unit price.
The real issue is that development costs are very, very high. In an aviation program, in particular, the cost of development can be 25-35% of the total funds that will be spent.
This is one of the biggest arguments put forth for continuing F-22 production…that the RDT&E ‘admission fee’ has already been paid, and the price of building more airplanes is not terribly high. As opposed to F-35, where the RDT&E process is still ongoing, and is soaking up large sums.
OTOH, if I walk into an auto showroom, all I want to know is how much this car in front of me will cost me. I don’t care how much GM spent on R&D that MAY be recovered if they sell enough units down the road.
I assume that Lex is referencing how much the next F-22 etc. will cost if we order additional units, not total program costs from day one.
Irregardless of what they actually cost, what one needs to vaguely remember is that the dollars spent go to an American company in an American state employing American workers,using American sub-contractors, using American shipping companies. And this American company generates profits that generate taxes and sweet returns into all those UAW and IBEW and NEA workers pension funds. You don’t see those same folks complaining when their stock investment goes up 19% in one year do you? And by this reasoning when you buy a car from GM you need to factor in the 60 billion bailout on a per unit basis.
Many years ago we had the $600 toilet seat debacle where the American public was told by a Democratic elected official that DoD was paying $600 for ONE toilet seat. We were besieged with “I can buy that at Ace for $14″ letters. But when we explained that duh, this was for an aircraft no longer produced, and not a standard toilet seat, and not made out of plastic, and the molds were destroyed, and the engineer had retired, and, and, and … it quickly came to $600 for re-engineering, re-drafting, re-machining, and re-shipping.
Time loves to stick sharp pointy objects in the military’s collective eye. I, like Gmac, don’t even give them the courtesy of a page flip.
Actually, it wasn’t a toilet seat. It was the entire toilet cover shell for the P-3…and Lockheed was making it in-house at a loss. Some twit said “I can do that for less”. Lochkeed sent him the drawings and invited him to bid.
He didn’t.
MM
Thanks for setting me straight. All i recalled was the volume of Congressional inquiries and mail the thing generated and the time spent answering the crap.
And we NEVER used the thing! Use it and you bought the crew a case of beer. I watched an FE soil his flight suit hurrying across the ramp to the head (taking little tiny, short steps) because he avoided nature’s call on a long flight…
What? The mighty EP-3E SkyPig didn’t make the list? I am so disappointed! Guess hand-me-down air frames and bargain bin equipment is still the way to go!
And what about how unit cost is affected by the size of the procurement? The unit price for a buy of 9 Super Hornets in the White House/Gates budget for FY10 worked out to $118 million per aircraft, and way back in FY06 a Strike Eagle buy worked out to more than $108 million per.
Now imagine if (when?) numbers are cut on the F-35, and what do you think the unit cost is going to be? I’d bet if you cut the F-35 buy to 200 units like they did the F-22, it would make the Raptor seem like a baaaahgain.
One of my former teachers (a very, very liberal Polysci department head) walked into our University’s helpdesk a few days ago, and caught me reading my Wall Street Journal. She bristled and asked me why I wasn’t reading the NYT… I told her it made good kindling.
The irony of it is, we KNOW how to run a procurement. You figure out how many aircraft you need, add projected losses, estimate (generously) the spares requirements….and BUY the entire batch as a single production run, with the plant working at full capacity.
Unfortunately, this would take coordination, shifting funds between branches of service (and maybe even between services) as each major procurement is executed. The only time I’ve ever seen anything remotely like it done was with the S-3 production…and they didn’t bother buying spares (which was why the S-3A had such horrible FMC rates).
I’ll add that it helps tremendously to be able to avoid the usual paperwork. The administrative overhead for an ACAT-1 procurement is massive…you spend YEARS getting the requirement approved, more years competing the contract, and about a third of the rest of the manpower available filling out forms.
I worked an ACTD (Advanced Competitive Technology Demonstration) once. Don’t ask which one. The whole specifcation was ten incentivized parameters. Went from contract award to first flight in less than three years.
Reform IS possible…but you have to completely jettison the existing procurement system to do it.
Mike M is sorta right about the procurement mess we have now. The PPBS is a leftover from the wizzkids and why it remains is a mystery. It doesn’t really serve anybodys needs today. There are periodic efforts to beat it out but they never work out in the long run because if the technology being acquired via other means proves valuable enough for mass production and procurement, why the powers that be shift acquisition procurement to the appropriate SYSCOM who then spends years going back and creating all the ACAT I or II or III documentation required or dies trying.
Never worked an ACAT-1 (praise Allah!) just a couple 2 and 3′s and a whole crop of 4′s, but I can offer this: if the P-8 ends up costing 290 million or even 300M, it’ll be a steal!
Mike- you’re misrepresenting (through being uniformed, not on purpose) the S-3A procurement for 187 jets. Why you picked that is beyond my comprehension. In certain ways it was a n experimental buy in a big lot but that was to make LocMart get healthy after it’s late 60′s screw ups with P-3′s & Japan, etc. Actually, FMC sucked (always a relative term) because what was fielded was so far beyond existing technology for an integrated weapons system of it’s time, that when the Carter stagflation kicked in there weren’t enough spare parts and a huge bowwave of infantile-mortality logistics syndrome set in, exacerbated by a lack of qualified techs. No, the S-3 line never reopened throughout the 70-80-90′s but it’s funny, ain’t it, that the aircraft was viable to the end and still is compared with all the other trash we keep patching and procuring out there….
Lex- gotta say you’re spinning a bit’o righteous indignation about your (our) beloved Navy Hornet E/F/G program but that’s OK. LOL. I think Time made a mistake and it should have just been Superhornets only in the article. E-F-G’s are a bargain and they wear and fly like bargains! Just kidding.
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Having been there on the bleeding edge of S3 fleet intro, the problem was directly tied to budget cutbacks. The a/c was designed with WRAs (replaceable assemblies). The built in tests would isolate faults to the WRA level, and magically, the tech would just pull the box out, draw one from supply, and right back to FMC, ya see!
But, when the cutbacks started (can’t blame it all on Carter — started well before he came into office, just accelerated, and didn’t get well until Reagan’s increased budgets), the spares were the easiest thing to cut. And, the number of days in I level passed the projections (not like that hasn’t ever happened) — result, pull the box, and you are now NORS. Put the box into AIMD, and wait until it comes back out. Certainly, as an AV/ARM DO in that timeframe, I was focused on the boxes in the tube. But there were similar problems in the a/f and engine shops as well.
It got so bad in ’79, that there was serious talk about just stopping it all. 40% MC rates weren’t getting any good press. As a result, LM sent seven tech reps to sea with us — two were focused on parts, on and off ship reqs. Got things better. Found out that the more your flew ‘em, the better they did (another lesson re-learned). Finished one at sea period with a ten a/c flyover — nothing on the hangar deck, which for that time was an amazing feat.
The lesson to re-learn this time, is that reducing spares is a false economy. Attractive target, but false economy. I can’t remember how high the man hour/flt hour got just because of the double manpower requirement of cannibalization — for just one example. Hopefully, the Navy has learned that there isn’t such a thing as free labor (Sean O’Keefe’s one contribution to the Navy was at least getting people to pay attention to that).
Enough memory induced pain for a Saturday morning.
I mentioned the S-3 because it’s always been known that the right way to procure a system was to buy the entire number required in one batch, storing the spare units and spare parts until required. Instead of buying a handful per year for twenty years. The S-3 procurement was the only one done that way.
I understand all you say Mike no slight implied or intended.
Your point is noted but certain spares (not all) suffered tremendously for the S-3A. Think about it in relation to other aircraft of the era. The Viking introduced integrated, truly multi-purpose displays x 4, online FLIR, online 3 mode radar, integrated electronically displayed (not paper) acoustics, sono reference system, auto ESM, mainframe computer with tactical mission and a whole bag of on line weapons/expendables. Nothing other like it in 1975. P-3C update 3 came along with 1/2 that capability in ’82, Single seat Hornet in ’84. Things to keep in mind.
That analog to digital era suffered at first for a lot of reasons besides how many spares were purchased upfront. The Tomcats with an amazing system for its time a couple years behind the Viking, also suffered.
Details- the devil is always in the details. Scott knows about the S-3- fly ‘em healthy.
New acquisitions will suffer other problems. The cost and effort to upgrade software for one, in a myriad of systems all talking to one another and the constant threat of obsolescence..all contribute to making the modern effort as complicated as those of the past. Spiral insertions are mandatory and even a good idea-if funded and completed on time/budget.
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