According to the article we have 158 already, order capped at 188. Actual cost is over 400 million each, triple advertised cost. And for what? China and Russia don't have significant air assets to justify this project.
You succumbed to the same logic failure that congress continually does w.r.t. acquisition costs. The RECURRING cost of an f-22 isn't $400M, just like the B-2 recurring cost isn't $2B. (it's about $100-150M and $500M respectively)
The "cost per airplane" always thrown out by the media is the program cost, divided by the number of aircraft (thus including RDT&E, which is extremely high for first-of-a-kind aircraft like these).
For instance, the B-2 program was about $45B, of which only $11B was the actual aircraft produced. The original ATB program was supposed to be 130-140 aircraft (if I remember correctly) for a total of $100B, or about $750M per. Congress said "$100B and $750M/aircraft?! That's too much! So they (making the I correct assumption of marginal cost, start by saying "well, if we cut it to 100, we will save $30 billion ($750M times 40 a/c cut)...of course, this only saves $20B, since only the recurring $500M per plane is cut--now the 100 planes "cost" $800M each. So time goes on, RDTE cost increase, so more marginal costs are cut...reducing the order further...now congress has 70 planes for $70B, and says "a billion a plane?!" let's save $50 billion by cutting it to 20 planes....and voila, $45 billion program for 21/22 planes :(
This also happened with the F-22, F-35, DDG-1000, seawolf, and a variety of other programs--seems our dear leaders seem to forget economy of scale and cost amortization--AND they do this cutting after most of the RDTE expenses are sunk---this is why we spend so much, and get so little, it's because we continually "waste" the front end costs of programs because we 1. Aren't allowed to do multiple-year budgeting and appropriations, and 2. Dumb leaders.
Another thing--congress always tries to reduce per year costs by stretching programs, when it has been conclusively proven that total program costs RISE when stretched--typically a 10% stretch results in a 5% cost increase, so less than half of the per-year reductions are realized...they then compensate by cutting procurement, which only reduces end-year costs, not current, and results not only in the above cycle, but also in a continued schedule slip that drives up costs. Since the bulk of RDTE expenses are labor related, program stretch often results in a 1:1 increase in RDTE costs--that's why the RDTE expenses are so high. ATB and ATF both had their RDTE times stretched by 50-100%, with commensurate increases in costs...which lead to their abysmal production numbers as the marginal costs were then cut.
If congress and the civilian DOD simply decided (early) which programs are delayed through an actual STOP, they could fully fund 80% of programs, instead of 80% funding 100% of programs...the former would result in minimal cost growth, and a savings compared to the latter of 10-20%, which would then allow fully (but delayed) funding of the remaining programs--with a huge increase in results. Since most program cost curves are front loaded (RDTE), followed by steady-state, and then a decline post-procurement, staggering the RDTE expenses across the services for big programs would not only reduce the cost per unit capability curve, as a whole, but result in a net schedule reduction for each increment in capability.
Basically--if you need a new bomber, a new fighter, a new sub, a new destroyer, a new tank, a new APC, a new.... Pick the most important ones that address the biggest capability gaps, do those first, fully funded and on schedule, then the next, then the next. This way, you can keep budgets under control--let's say most programs if fully funded are a 5-10-20 timefram (years RDTE, production, sustainment), staggering the program starts for each service by 5 years (and let's say 4 major programs per service, e.g. A bomber, fighter, tanker, and helo, or a sub, carrier, amphib, and destroyer, or a MBT, APC, truck, and helo), all 4 would be through RDTE in 20 years (about 20% longer than now), but you would have 3 of 4 years earlier, at lower cost...which also would reduce O&M costs of fixing the older equip those 3 of 4 are replacing.
Note, this does require multiple-year appropriations and budgeting to prevent program reallocation and stretch, otherwise the gains are totally lost
This isn't news...this is basically the recommendation of most procurement reform proposals, books on the subject, etc.
Funny thing is, congress screams at DOD to reduce costs, when it's congressional micromanagement and budget process that keep DOD from reforming to reduce costs.
Argh. Now I'm all pissed off :(
