I've read attentively. Then explain why do you count price 210 billions but not 299?? why do you use the price on 2002 year but not current price??
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Real cost of an F-22?
- Thread starter djpav
- Start date
I've read attentively. Then explain why do you count price 210 billions but not 299?? why do you use the price on 2002 year but not current price??
Because it isn't a current price, it's a "then year" price. That is, each dollar spent is at the prices of the year in which it is spent. For past years, it's actual money spent. For future years, it's a prediction, calculated by predictingI've read attentively. Then explain why do you count price 210 billions but not 299?? why do you use the price on 2002 year but not current price??
1) how many JSFs will be bought each year
2) what the constant-price cost of each one will be for each year (that is predicted to change over time)
3) what the general price level will be each year
and combining the predictions.
If inflation is not exactly as forecast, or the pattern of purchases changes (e.g. 100 are bought in year X & 200 in year Y, instead of 150 in each year), so will the "then year" price, even if the cost in constant dollars remains unchanged. It's therefore an artificial number, dependent on three predictions any or all of which may be wrong.
The constant dollar costs are not fixed, only the denominator in which they are expressed. If general inflation is 5%, & JSF costs go up by 10%, the constant price JSF cost goes up by 110/105.
Because of the way it's calculated, one can't apply a simple conversion ratio to the "then year" price to turn it into, e.g., 2008 prices, but one can apply a simple conversion ratio to the 2002 price. The conversion ratios are online in the US budget, & the latest ratios are at http://www.whitehouse.gov/omb/budget/fy2009/hist.html - section 10, click on the link. Excel spreadsheet.
http://www.dutchnews.nl/news/archives/2009/04/first_jsf_fighter_jet_will_cos.php
Re jsf cost the test planes are apparently 110m Euros = US$142m...
Re jsf cost the test planes are apparently 110m Euros = US$142m...
With these programs running so many years the "final" cost is impossible to determine until all the deliverables are handed over to the Air Force. Even a firm fixed price contract isn't firm fixed price if the contractor can show they are entitled to equitable adjustments. They will have extensive line item costs with supporting documentation so if there is a cost escalation for anything unforseen (like the rise in cost for materials or labor) they have but to ask for renumeration.
A simple example of how this works is that the contractor will have pricing for titanium widgets. They will have allocated X dollars for the materials (titanium) based on pricing secured through a vendor. If the cost of titanium on the market increases and the vendor is forced to pass that cost escalation on to the manufacturer they are entitled to an equitable adjustment as long as they can provide documentation of increased costs. This happens every day in the government contracting world, and it happens in the commercial world as well. It's more pronounced in the acquistion of systems like aircraft due to the length of time involved, more time equals more risk for cost escalations. There are rules and limitations in the general and special conditions of the contract but this is an everyday occurrance that isn't limited to the US.
A simple example of how this works is that the contractor will have pricing for titanium widgets. They will have allocated X dollars for the materials (titanium) based on pricing secured through a vendor. If the cost of titanium on the market increases and the vendor is forced to pass that cost escalation on to the manufacturer they are entitled to an equitable adjustment as long as they can provide documentation of increased costs. This happens every day in the government contracting world, and it happens in the commercial world as well. It's more pronounced in the acquistion of systems like aircraft due to the length of time involved, more time equals more risk for cost escalations. There are rules and limitations in the general and special conditions of the contract but this is an everyday occurrance that isn't limited to the US.
blackhawknz
New Member
The F-22 is going to end up cheaper than a F-35 now and USAF is going to be kicking them self for speeding Billions on an inferior Jet.
The F-22 is going to end up cheaper than a F-35 now and USAF is going to be kicking them self for speeding Billions on an inferior Jet.
How is it inferior? Are you just making these observations on things like speed?
To say nothing of the "inferior jet" comment. Blackhawknz, I would thoroughly recommend reading up on the capability the F-35 is intended to provide, and reading up on the complex limitations placed on the F-22 fleet, before you start making assumptions about the relative value of a given aircraft. Please note that I'm not saying one is better than the other, I'm saying that understanding capability is more complicated than "jet x is better than jet y".