The Pentagon has notified Capitol Hill of an updated “concurrency” cost estimate for
low rate initial production (LRIP) lots 1-12 that has declined by 2% compared with the previous year’s evaluation, to $1.41 billion, because of fewer “forecasted issues.”
With the completion of development testing, issues forecast to emerge from flight testing declined from $150 million in the 2017 cost estimate to $30 million in the 2018 prediction, Pentagon acquisition executive Ellen Lord writes in a July 5 Joint Strike Fighter concurrency cost report. The report complies with the 2012 Military Construction and Veterans Affairs and Related Agencies Appropriations Act. Aerospace DAILY viewed a copy of the report.
The
defines concurrency as an overlap in the development and production phases of an acquisition program. This requires modifications to early production lots because of deficiencies discovered during qualification, ground and flight tests, or because of new engineering analysis.
“Incorporation of concurrency design changes adds cost because of recurring engineering activities, production cut-in, and retrofit of existing aircraft,” the report says. “These costs do not include the nonrecurring engineering costs incurred to develop engineering solutions associated with these changes.”
Planned and scheduled block upgrades to each aircraft are handled separately and are not considered concurrency costs by the Pentagon. For any LRIP lot there are potentially three types of concurrency changes: items discovered before beginning production of the lot; changes during the period of performance of any given lot; and things discovered following delivery of the last aircraft in a given lot.
“Retrofit activities to incorporate changes into operational aircraft compose the major portion of concurrency costs,” the report reads. “Examples of retrofits that have been performed include the F-35B Auxiliary Air Inlet Door Assembly, the F-35B Fuselage Station 496 Bulkhead modification, and Forward Root Rib modification for the F-35A and F-35B.”
Meanwhile, so-called known concurrency issues, which make up the bulk of the total $1.41 billion concurrency estimate, increased by 7%, or $90 million, compared with last year’s estimate, for a total of $1.38 billion. A reason for the uptick in the estimate is because final cost estimates realized for known issues are higher than the initial estimates due to the engineering change proposal definitization process.
Another explanation the report provides is “new known issues” that were identified—these are technical issues declared deficient from December 2016 through January 2018.
For instance, a power and thermal management system turbomachine aft frame oil leak will cost roughly $56 million, and the teardown of the F-35B after its second-life testing is about $40 million.
“With a third life test planned, teardown of the F-35B was originally outside the scope of [System Development and Demonstration] and was removed from the Concurrency Report,” the report reads. “Due to structural damages from second life testing, the third life testing was canceled, so the F-35B tear down was added back into the list of new known issues.”
