Tuesday, March 23, 2010
Yet, independent analyses by multiple federal entities state the numbers just don’t add up. That was true in the 2007 Cost Analysis Improvement Group (CAIG) report from the Office of the Secretary of Defense and it’s even more striking in light of the 2010 Cost Assessment Program Evaluation (CAPE) update.
The original CAIG report presumed competitive pricing of two engines would occur in 2014, with immediate cost savings to be augmented by others in later production. Yet, even under these conditions, the DoD concluded that on a net present value basis, the F136 would cost an additional $1.2 billion and the potential life-cycle cost-savings were not compelling.
Now in 2010, CAPE Director Christine Fox maintains that even with the additional Congressional funding to date, another $2.9 billion will be needed to get the F136 to true competition in 2017, three years later than previously planned. Recognition of that multi-billion dollar figure is important, because lower ones quoted by supporters of the alternate engine underestimate the inevitable challenges lying ahead for the F136 team, and misleadingly omit tooling, logistical support and other inherent costs associated with bringing the alternate engine into production.
So, at this pivotal stage in the F-35’s funding stream, and in light of how billions could be better spent just about anywhere else, the CAPE update concludes the following: a two-engine program is at best at the breakeven point on a net present value basis and any lifecycle cost savings still do not make a compelling business case for the additional $2.9 billion expenditure. In fact, the net present value breakeven point would not occur until 2035 and would require average engine unit cost savings of 21%. This means the alternate engine would have to be priced $2 million lower. This scenario is improbable at best, and more than likely impossible. Classic competitive forces are not going to produce that type of savings.
Moreover, this breakeven proposition is highly optimistic as it presumes a seamless transition to production based on lessons learned from the F135, as well as an efficient mix of engines in the competitive buy. The latter point is especially troubling because very few customers will purchase from both F-35 engine teams. Thus, rather than true competition, the likely result from continuing the F136 funding stream is the cannibalization of engine orders between two supply chains mitigating any “pie in the sky” out-year savings.
The antidote to all this uncertainty is an F135 that leverages the proven F119 heritage, has now retired more than 90 percent of program risk, achieved more than 13,000 test hours, nearly completed SDD deliveries and already made its first production deliveries. A single engine program, the norm for military fixed- and rotary-wing programs during the past 30 years, will maximize dollars allocated for future safety and performance enhancements and achieve more supply chain efficiencies than an inefficient dual-track approach.
At the end of the day, it is fiscal responsibility, not politics that continues to drive unambiguous recommendations from President Obama and Defense Secretary Gates for Congress to discontinue funding the F136. The alternative: a $2.9 billion cost burden to be shouldered with no future benefit anticipated. Truly, this is a matter of dollars and sense.
Thursday, March 18, 2010
From Lockheed Martin: “Today’s vertical landing onto a 95-foot square pad showed that we have the thrust and the control to maneuver accurately both in free air and in the descent through ground effect,” said F-35 Lead STOVL Pilot Graham Tomlinson.
Tomlinson performed an 80-knot (93 miles per hour) short takeoff from Naval Air Station Patuxent River, Md., at 1:09 p.m. EDT. About 13 minutes into the flight, he positioned the aircraft 150 feet above the airfield, where he commanded the F-35 to hover for approximately one minute then descend to the runway.
“The low workload in the cockpit contrasted sharply with legacy short takeoff/vertical landing (STOVL) platforms,” said Tomlinson.
From Defense News: "The aircraft hovered for about 96 seconds," said Chris Geisel, a spokesman for Lockheed Martin. "It then went up and down and turned right and left to check maneuverability before coming in for a slow 70 knot landing."
Graham Tomlinson, F-35 lead STOVL pilot, slowed the aircraft in flight from 200 knots, first to 60 knots, then to zero.
Perhaps the adage that March “comes in like a lion” applies to more than just weather. That’s certainly what happened the week of March 8. Seemingly overnight, the F-35 engine debate heated up, driven by significant budgetary and programmatic scrutiny.
The week began with a Monday, March 8th issue brief from Dr. Loren Thompson of the Lexington Institute, who encapsulated the issue of alternate F-35 engine funding by reinforcing at least five key points. First, $2.9 billion will be needed in the near term to develop the alternative F136 engine, while predicted savings over the long term are based on highly optimistic assumptions that may never pan out. Second, most modern military aircraft are developed with just one engine supplier and fleet-wide groundings almost never occur. Third, the still nascent F136 is the more likely of the two engines to suffer a significant problem, based on its protracted development and troubled performance to date. Fourth, two engines won’t bolster reliability because operations, maintenance and even future technology improvement funds would be split between two incompatible systems. Lastly, neither the taxpayer nor the F-35 customers would be well served to support two supply chains, when one has clearly outperformed the latter.
This last point takes us to a couple of mid-week articles that initially reported some inaccurate cost figures for the F135. The bottom line: there are no new cost overruns on the F135 engine, and any additional expenses are tied to ongoing restructuring of the entire F-35 program. The federal government continues to express confidence in Pratt & Whitney’s cost reduction strategy, which is illustrated by an 11% drop in the LRIP-4 contract offering. Additional double-digit cost reductions are projected for future lots as well.
These proven savings stand in start contrast to the revisionist claims of those supporting a repeat of the “Great Engine War” of the 1980s. In a February 23rd memo to House Armed Services Committee Chairman Rep Ike Skelton, Deputy Secretary of Defense William Lynn wrote, “While much has been made of this example, the facts tell a more nuanced and inconclusive story. There were only minimal reductions in the acquisition unit cost price of the engines purchased for the F-15 and F-16 programs. Accordingly, it is difficult to cite this example to justify substantial savings due to competition.”
During a Wednesday, March 12th press conference, Undersecretary of Defense Ashton Carter reiterated the Defense Department’s concern regarding “hypothesized savings” for the F136 engine based on “some very optimistic assumptions that we don't think it is reasonable to accept.” And if recouping sunk costs doesn’t hold much allure, neither does the prospect of a second engine on technical grounds.
"We are not in the 1980s any longer, where high-performance engines had suspect reliability," Air Force Chief of Staff Gen. Norton A. Schwartz said. And he reiterated that only the U.S. Air Force is likely to buy from both engine manufacturers. "The Navy is not going to have two engines aboard ship," he said. "Our international partners are not going to have two engines. So the reality is that if we have an alternate engine and if there is a mandate for that, that obligation will ride primarily on the Air Force."
A disadvantageous “directed buy” scenario outlined by Undersecretary Carter and General Schwartz brings us to Gen. (Ret.) John Michael Loh, former commander of the Air Force’s Air Combat Command. In a Defense News editorial published on March 15th, General Loh brought up yet another important issue, stating “Air Combat Command will not receive its first operational F-35s with alternate engines until 2017. In my experience, putting an immature engine on a single engine fighter in high-rate production will result in many unnecessary, perhaps fatal, accidents while the new engine plods through its inevitable infant mortality phase.”
Above and beyond any potential safety of flight issues is the historical fact that two engines impact every facet of operations. “My firsthand experience with the F-16, after the introduction of the alternate engine, showed it limited operational flexibility significantly,” wrote General Loh. “It restricted decisions on basing because all F-16s at a base had to have the same engine, and it limited choices for deploying units for the same reason. Maintenance training and logistics support were more costly and complex.”
Friday, March 12, 2010
One of those dimensionally challenged domains is the interior of an aircraft carrier. Inefficient space utilization simply isn’t an option, yet that’s what would happen if the Navy were forced to stock spare parts and tools for two completely different engines powering the F-35C fleet.
The Pentagon’s Chief of Naval Operations, Admiral Gary Roughead went on record repeatedly last summer against the F136 alternative engine, including telling Congressional Quarterly last June, “Space is at a premium. Therefore you can put me solidly in the one-engine camp.” The same concern is even more acute aboard the U.S. Marine Corps’ amphibious assault ships, the future seaborne home of the F-35B STOVL version.
In testimony to the Senate Armed Services Committee on February 25, 2010, Admiral Roughead reiterated his concerns.
“One can look at a carrier and see a very large ship, but when that ship is deployed we have things packed in almost every nook and cranny in order to provide that reliability and responsiveness,” he said. “So having to stock two different types of engines is just not practical for us.”
So, if F-35B and F-35C aircraft destined for the U.S. Navy and Marine Corps will be powered by the Pratt & Whitney F135 – based on the clearest of Pentagon intentions stated above, plus the insurmountable development and production lead the F135 has over the F136 – then the latter team must surely be pinning their hopes on the U.S. Air Force and select foreign customers.
This merging reality completely undermines the so-called “competition” argument on at least two fronts.
First, at least two of the three U.S. services will have a single engine fleet, powered by the F135 that continues to retire risk as we’ve previously discussed, while the F136 gets pushed farther to the right due to developmental and budgetary difficulties. The reliability and safety of the F135 is a known quantity, further validated with every hour of accumulating flight time, compared to the still developmental F136. Moreover, history has proven that the best way to introduce a single engine fighter into the fleet is to first mature the engine on a two engine airplane. The F119 powering the twin-engine F-22 has done just that, accumulating more than 275,000 hours and is the most successful fighter engine ever fielded. This proven F119 platform forms the core of the F135. The successful performance of the F135 is built on the long legacy of safety, maturity and unmatched performance established by the F119.
The other important issue remains cost. We’ll give Admiral Roughead the final word, quoting again from his February 25th testimony, “The costs associated with the alternate engine in my opinion would simply continue to pressurize a program that is already being pressurized for a variety of reasons. So from the perspective of the Navy and the support that I render to the Marine Corps and their Joint Strike Fighter…my recommendation has been and will continue to be one engine, because that’s what serves us the best.”
Thursday, March 11, 2010
Monday, March 8, 2010
Thursday, March 4, 2010
Milestones may be commonplace in the aerospace and defense industry, but some are patently more significant than others. Last week saw one such illustrious milestone; but, enough with the suspense.
Pratt & Whitney has achieved Initial Service Release (ISR) for the Conventional Take Off and Landing/Carrier Variant (CTOL/CV) F135 engine powering the F-35 Lightning II. Simply put, ISR means that the F135 meets all safety, reliability and performance parameters for operational use by U.S. and allied warfighters. The F135 engine, the beneficiary of the heritage of the F119 engine powering the F-22, has achieved more than 13,000 test hours and roughly 200 flight hours, and has thus proven itself to the F-35 Joint Program Office and all who rely on its oversight and expertise.
The ISR designation marks the culmination of the CTOL/CV System Development and Demonstration program, during which Pratt & Whitney delivered 17 flight test engines, as well as the first production F135 engine. The final Short Take Off and Vertical Landing (STOVL) flight test engine will be delivered in a few short weeks, while an F-35B continues short landing testing leading up to its first vertical landing. Such steady progress may not generate lots of headlines, but we think quiet competence and consistent performance speaks for itself.
Also last week, the Department of Defense unambiguously reiterated their firm opposition to the F136 alternate engine development program, still in its nascent form yet already having cost the taxpayers billions of dollars.
“The secretary [Gates] has made it clear to you all, and he's made it clear to the Congress time and time again, that the pursuit of a second engine, in his estimation, is a colossal waste of money, and that it will not result in any competition between companies,” said Pentagon Press Secretary Geoff Morrell on February 25. “The so-called great engine wars of the '80s, which…revisionist history would suggest…resulted in some great savings to the taxpayer. I think the actual analysis shows that, if there was a benefit, it was negligible.”
So the contrast is crystal clear. Morrell added, “It's $4 billion that we can't afford to spend, on things that we don't need or are duplicative. We need that money to support our warfighters in the fights they are in now.”
President Obama and Secretary Gates have reaffirmed a veto threat if wasteful F136 funding continues. Congress has the opportunity to fulfill its most basic obligation: direct scarce taxpayer dollars where they will do the most good without needlessly endangering the entire budgetary process. And in light of Initial Service Release for the CTOL/CV F135 and continued progress towards the first vertical landing of the STOVL version – what better argument can be made for the performance of this engine and its readiness to serve?