These appendixes explain the methodology used in an analysis of the costs and savings of joint aircraft acquisition programs. They illustrate calculations for theoretical maximum savings in acquisition and in operations and support, historical joint aircraft cost-growth premiums, savings needed to offset premiums, and two cost-comparison methodologies.

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Do Joint Fighter Programs Save Money?

Technical Appendixes on Methodology

by Mark A. Lorell, Michael Kennedy, Robert S. Leonard, Ken Munson, Shmuel Abramzon, David L. An, Robert A. Guffey

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Research Questions

  1. Have historical joint aircraft programs saved Life Cycle Cost compared with single-service programs?
  2. Is the F-35 Joint Strike Fighter on track to achieving the Life Cycle Cost savings anticipated at the beginning of full-scale development?
  3. What factors contributed to cost outcomes in historical joint aircraft programs and the F-35 Joint Strike Fighter?
  4. What are the implications of a joint aircraft approach for the industrial base?
  5. What are the implications of a joint aircraft approach for operational and strategic risk?

These appendixes explain the methodology used in an analysis of the costs and savings of joint aircraft acquisition programs. They illustrate calculations for theoretical maximum joint aircraft savings in acquisition and in operations and support, historical joint aircraft cost-growth premiums, savings needed to offset premiums, and two cost-comparison methodologies.

Key Findings

Joint Aircraft Programs Have Not Historically Saved Overall Life Cycle Cost

  • Historical joint aircraft programs on average experienced substantially higher cost growth in acquisition (research, development, test, evaluation, and procurement) than single-service programs. The maximum percentage theoretical savings in joint aircraft acquisition and operations and support compared with equivalent single-service programs are too small to offset this additional average cost growth that joint aircraft programs experience in the acquisition phase.

Joint Strike Fighter Is Not on the Path to Achieving the Savings Anticipated at Milestone B

  • Under none of the plausible conditions analyzed did the F-35 Joint Strike Fighter have a lower Life Cycle Cost estimate than three notional equivalent single-service programs.

The Difficulty of Reconciling Diverse Service Requirements in a Common Design Is a Major Factor in Joint Cost Outcomes

  • Diverse service requirements and operating environments work against the potential for joint cost savings, which depend on maximum commonality, and are a major contributor to the joint acquisition cost-growth premium identified in this cost analysis.

Joint Aircraft Programs Have Historically Been Associated with a Shrinking Combat Aircraft Industrial Base

  • The presence of fewer credible fighter aircraft prime contractors in the market reduces the potential for future competition, may discourage innovation, and makes costs more difficult to control.

Recommendation

  • Unless the participating services have identical, stable requirements, the U.S. Department of Defense should avoid future joint fighter and other complex joint aircraft development programs.

Table of Contents

  • Appendix A

    Calculation of Theoretical Maximum Joint Aircraft Acquisition Program Savings

  • Appendix B

    Calculation of the Joint Acquisition Cost-Growth Premium from Historical Aircraft Programs

  • Appendix C

    Calculation of Maximum Joint O&S Savings from an "Ideal" Joint Fighter Program

  • Appendix D

    Exploring the Magnitude of Joint O&S Savings Needed to Offset Joint Acquisition Cost-Growth Premium

  • Appendix E

    Primary Methodology for Comparing JSF Costs with Those of Three Notional Single-Service Fighters

  • Appendix F

    Alternative Procurement Methodology and Results for Comparing JSF Costs with Those of Three Notional Single-Service Fighters

Research conducted by

The research described in this report was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE.

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