F-35 Cost Up $7.8B, Bogdan Fires on Pratt
Much of the $4.5 billion in cost increases in the past year to the now $398.6 billion U.S. portion of the F-35 program are due to overly rosy projections on anticipated decline in the “cost curve,” or price to build the stealthy fighter, says USAF Lt. Gen. Christopher Bogdan, F-35 program executive officer. Performance continues to fall short of projections for two major reasons: cost from the prime contractors and major subcontractors – including labor rates and overhead -- and delayed purchases by Joint Strike Fighter customers. These are realities behind adjustments in the long-term pricing estimates for the multinational F-35 included in the 2013 selected acquisition report, a document required annually by Congress on major weapon systems. The F-35 program office shared this fact sheet with reporters to provide context for the report. Total program cost -- including development, procurement and 55 years of sustainment -- is estimated to cost $398.6 billion, over last year’s estimate of $391.2 billion. Of that, $4.5 billion is in the procurement portion of the program. Bodgan says that in the context of program cost, this increase is negligible. But, he is no less frustrated with contractors’ pricing issues. After years of pushing Lockheed Martin, aircraft prime, to attack its production pricing cost, prime engine manufacturer Pratt & Whitney is now in Bogdan’s crosshairs. “We had a price curve for these engines. We thought we knew how much it was going to cost … Pratt is not meeting their commitment. It is as simple as that … It is not good. Not good at all,” Bogdan told reporters April 17. “Some of their business base has dried up on other programs and projects … and what they are doing is they are spreading their overhead costs and they are spreading them right where they can. I don’t like that. [They] need to get back to the promise they originally made to us.” Pratt & Whitney spokesman Matthew Bates says the company has decreased its pricing 40% since the first production lot, but the company is claiming competitive privilege in its sole-source deal for F-35 engines in not releasing its actual numbers [read Pratt Claims Competitive Privilege in Concealing F135 Prices]. Negotiations for low-rate, initial production lots 7-8 are under way and slated for completion in the summer, he says. Bogdan seems frustrated by the lack of leverage he has in dealing with a monopoly engine provider. “There is only one engine on the F-35. Period,” he said. “When you are in a sole source environment it is difficult to find the right leverage and motivation and drive the cost out of a program.” The total average unit cost of an F-35 is $130 million, including the amortized cost of the total program (development, procurement, sustainment and the undisclosed cost of Pratt’s F135 for all variants) assuming a buy of 2,443 U.S. fighters as planned. The flyaway cost (price of the total buy divided by the 2,443 fighters planned for Washington) is $104.8 million. These prices reflect the anticipated U.S. buy, including the president’s fiscal 2015 budget request (pushed 33 F-35Cs and 4 F-35As beyond the future years defense plan). He referred to this dynamic simply as “acquisition physics.” These prices should be lower if anticipated purchases from South Korea, Singapore and Israel (which is expected to exercise options on top of its buy of 19 aircraft) are realized. However, Canada, Turkey and the Netherlands have held off on buys, driving the near term cost of the aircraft up. Bogdan says adjustments between these two forces would essentially break even. While anticipating more commitments, Bogdan says he is encouraging Lockheed and Pratt to begin buying in bulk from their suppliers to achieve better economies of scale and avoid waiting for the government’s lead in an annual procurement number. “Two or three years ago the business risk was very different than it is today,” Bogdan says. “We went through two years of sequestration, and this program basically came out unscathed.” Pratt is ahead of Lockheed in this process owing to common parts among other programs – including its commercial business – and the F135 program. “They had a lot of that in place,” he said. Another factor contributing to the $7.8 billion total program cost increase are adjustments in the exchange ranges and inflation indices. Roughly 30% of the aircraft is sourced outside the U.S. – primarily from BAE Systems in the UK and Alenia in Italy. Thus, the dollar’s weakening status against the British pound and Euro are a factor. Additionally, some of the change is reflective of inflation rates. Though program officials had anticipated full-rate production in 2018, it could slip into 2019. Bogdan says he still expects the total flyaway cost for the F-35A to be under $85 million at full-rate production.
Mistrial declared for 2nd Warlocks MC member in VFW shootout
Two days after the trial began for a second member of the Philadelphia Warlocks Motorcycle Club accused of killing two rival club members in 2012, the trial ended in a mistrial.
The mistrial was announced after the jury heard that the defendant, Victor Amaro, was a convicted felon. By law, jurors can’t know a defendant’s criminal record.
The trial will be reset, and Amaro is expected back in court next week.
Prosecutors argue that bullets from Amaro's gun killed two Orlando Warlocks MC members at a charity poker run at the Winter Springs Veterans of Foreign Wars post.
The state believes its case against Amaro is stronger than the case against David Maloney, who was acquitted of murder charges last week.
Prosecutors are still deciding whether to re-try Maloney on the one count of attempted murder that the jury deadlocked on.
Maloney is now a free man and a judge recently denied a request from the state to put him on electronic monitoring and under house arrest.
Maloney's attorney argued his client has been getting threats online and he fears for his life. He said keeping Maloney at home would make him an easy target for his enemies.
Jury finds mother, daughter guilty of lesser charges in death of 2-year-old
A Clayton County jury has found a mother and daughter guilty in the death of a 2-year-old child.
Prosecutors charged the owner of Marlos Magnificent Early Learning Center, Marlo Fallings and her daughter, Quantabia Hopkins, a teacher there, with felony murder.
A jury found Fallings guilty of reckless conduct. Hopkins was also found guilty of reckless conduct and involuntary manslaughter and contributing to the deprivation of a minor.
Fallings and Hopkins were found not guilty of murder.
Channel 2’s Tom Jones was live in Clayton County where even the prosecutors were seen in tears over the case.
Jones said Clayton County assistant DA, Deah Warren, choked up as she told the jury that 2-year-old Jazmin Green would be picking out an Easter outfit today if it were not for the defendants' reckless actions.
During closing remarks, Hopkins also cried. Thursday, prosecutors rested their case and the judge dismissed two counts against the defendants. After hearing the state's case, the judge threw out cruelty to children and contributing to the deprivation of a minor charges against the two. April McAlister broke down crying in court as prosecutors showed pictures of her 2-year-old daughter, after she was transported to Southern Regional Hospital in June 2011. Green died after prosecutors said she had been left in a day care van for more than two hours on a 93-degree day. The state said Fallings and Hopkins were criminally negligent in Green’s death. Green was left in the van after the day care visited a Chuck E. Cheese’s. Prosecutors said Fallings lied on a state form, saying she was one of two required adults on the field trip. They said 16-year-old Miesha Ridley lied and said she was an adult on the form. Ridley was left in charge of making sure all the children were off the bus when they returned to the day care. Ridley testified she didn't notice Green when she checked the van. Green's mother blamed Fallings and Hopkins for giving her that important responsibility. “She only did what they told her to do. I don't think she would have done that,” McAlister said.
Prosecutors said Hopkins faces 10 years in prison plus 36 months. Fallings faces 12 months in jail.
Frankel headed to Ukraine, says ‘my mother is not happy’
Frankel speaking at a 55+ community west of Delray Beach today.
U.S. Rep. Lois Frankel, D-West Palm Beach, will head to Ukraine on Thursday along with other members of the House Foreign Affairs Committee.
“My mother is not happy” with her visit to the international trouble spot, Frankel told about two dozen retirees at the Bridgeview community west of Delray Beach.
Frankel said she doesn’t know many details about her itinerary.
In an interview, Frankel said she’s had several meetings on Ukraine, including a dinner last week with about a dozen members of Congress and about six ambassadors from Eastern Europe.
“Their take is they are very worried,” Frankel said of the Eastern Europeans. “Some of them are just worried about us getting back into a Cold War kind of situation. I don’t think anybody really trusts (Russian President Vladimir) Putin.”
Frankel added: “There’s absolutely no talk of any military action at all. I don’t even think that’s possible. But there’s other discussions: What do we provide to people in Ukraine? But that’s something I hope we’re going to explore on the ground when we talk to some of the leaders there.”
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