The F-35 Joint Strike Fighter program has reported a new cost estimate that breaks the $2 trillion barrier to acquire and operate, including a revised aircraft and engine tab of $485 billion that essentially doubles the original price tag formulated based on Lockheed Martin's design.
This estimate -- which reflects a roughly $100 billion increase since the program’s 2010 Nunn-McCurdy breach prompted a concerted effort to rein in ballooning costs -- shows program costs in late 2023 as part of the fiscal year 2025 budget proposal as detailed in a Modernized Selected Acquisition Report made public recently by the Defense Department.
The convention for dating each annual SAR is to label it Dec. 31 -- in this case, Dec. 31, 2023. The intent is for the information in the report to be consistent with the president’s budget submitted to Congress the following February.
The cost estimate does not reflect projects such as the new Core Engine Upgrade program, which will likely raise the total estimated price tag in future F-35 program accounting.
In late 2003, the Pentagon reported to Congress its first complete cost estimate -- a $244 billion plan to buy “an affordable, highly common family of next-generation strike aircraft for the U.S. Navy, Air Force, Marine Corps.”
Now, the project to buy 2,456 F-35s will cost an estimated $485.2 billion, including $401.1 billion for the Lockheed Martin aircraft and $84.1 billion for the Pratt & Whitney F135 engines, according to DOD.
In addition, the program estimates the cost to operate and sustain the fleet through the 2080s will be $1.578 billion for a total life-cycle acquisition tab of $2.063 billion.
SARs, produced annually since 1969 for the Pentagon’s largest weapon system programs, are the primary means by which the Pentagon reports the status of major weapon system acquisitions to Congress. The reports provide financial estimates that include research and development, procurement, military construction and acquisition-related operations and maintenance costs, summing up actual costs to date as well as anticipated expenses.
The report to Congress says $55 billion in cost growth in “then-year” amounts -- which account for future inflation assumptions and are the basis for Pentagon budgeting plans -- “largely results from inflation attributable to fuel and supplier costs associated with war and pandemic challenges.”
Using “constant-year” amounts, the Pentagon’s 2023 Annual Cost Assessment (ACE) for the F-35 marked a $45B decrease from the 2022 ACE. “This is attributable to successful affordability initiatives as well as altered beddown plans and fight hour reductions,” according to the report.
In February 2023, the F-35 program initiated a “War on Cost” initiative “to renew an enterprise-wide focus on cost control.” That effort completed 14 initiatives that allowed the program to shave $83 billion from the total cost estimated to operate and sustain the fleet.
Even with the “War on Cost” efforts, the total operation and sustainment costs remain stubbornly high: $1.5 trillion. In 2012, the Pentagon aimed for the F-35 to be at least as cost-effective to operate as the older aircraft it was replacing. The Pentagon has now abandoned that expectation.
“Comparing the costs of the [fifth-]generation F-35 to legacy aircraft proves challenging. Given the significant increase in military capabilities provided, DOD reasonably expects F-35A to cost more to operate and sustain than [fourth-] generation legacy aircraft,” states the report.
Lt. Gen. Mike Schmidt, director and program executive officer of the F-35 Joint Program Office, issued a statement about the SAR that does not directly address the revised cost estimate. The statement highlights the number of aircraft deliveries, updates on participation of foreign partners work completed to support a full-rate production decision in March.
“The [SAR] also emphasizes schedule delays associated with Technical Refresh 3 configured aircraft delivery,” Schmidt said. “In July, the F-35 Program began executing acceptance of TR-3 aircraft with initial training capability. In August, aircraft were delivered with additional software providing a robust combat training capability, as we continue towards the delivery of full TR-3 combat capabilities in 2025.”