Military AI Works

USAF Seeks $117 Billion in Fiscal 2009: The Administration is asking Congress to provide the Air Force with $117 billion next fiscal year to sustain its fleet for the current fight, build a new inventory, and take care of its personnel. The total is $8.6 billion, or roughly eight percent, higher compared to what Congress approved in Fiscal 2008, but the rising costs of fuel and doing business, in general, eat up a good portion of that proposed increase, USAF officials said. When factoring non-blue accounts, USAF's total obligation authority in Fiscal 2009 would rise to $143.9 billion, compared to $134.6 billion in Fiscal 2008. There are no real surprises in the new budget proposal, which went to Capitol Hill yesterday. The big-ticket aircraft and satellite projects stay on course, with no major cut backs or cancellations. There's no money for F-22s beyond 183 or C-17s beyond 190. But neither is there funding included to shut down those lines, meaning USAF is leaving its options open. USAF asks for $41 billion for modernization, an increase of $3.6 billion compared to Fiscal 2008, $37.6 billion for personnel (plus $1.7 billion), and $33.2 billion for readiness (plus $3.7 billion), and $5.2 billion for infrastructure (minus $400 million). The decline in infrastructure earmarks reflects the Air Force's strategy to accept risk in that area to free up resources for modernization, the officials said. It seeks to buy 93 aircraft, two satellites, four space launch vehicles, and more than 7,700 missiles and bombs. (For more on the budget, read By the Numbers)

http://206.204.189.217/AFA/Features/mod ... budget.htm The "by the numbers article"

From AF Daily report 5 FEB 08

Letting Go: The Air Force would like to retire 182 aircraft in Fiscal 2009, according to the service's newly released budget proposal for next fiscal year. This includes 24 C-130E/H transports, one E-4B National Airborne Operations Center platform, 17 F-15 A-D and 45 F-16 A-D fighters, 38 KC-135E tankers, 52 T-37B trainers, and five U-2 reconnaissance airplanes. How many of these airplanes Congress will actually allow USAF to phase out remains to be seen as, dare we say, the parochial interests of lawmakers sometimes get in the way. Each year USAF puts out its wish list of retirees and makes the argument that ridding itself of aircraft well past their prime that sap resources and offer only diminishing returns would free up dollars to procure modern airframes. But each year, lawmakers shorten the list and mandate that platforms such as Eisenhower-era KC-135 tankers and Vietnam War-era C-130 transports stay in service, just in case. While senior Air Force officials have said in the past year the climate with Congress is improving in this area, there is still the desire for the autonomy to manage the inventory most efficiently-a state that can only be achieved without overly intrusive oversight. USAF, for example, sought to retire more than 300 aircraft in Fiscal 2008, but ended up with permission to get rid only of 58.

From AF Report 6 Feb 08

February 29, 2008
AFA Members, Congressional staffers, civic leaders, and DOCA members, I have been both astonished and dismayed when I see cost numbers cited in the press and in Congressional hearings. The simple fact is that many of these numbers are being "spun" by the user. [Who was it that said something famous about the use of statistics?]

So, what I have done is to present to you how the Air Force buys aircraft ... for a fleet that will last ... 20, 30, 40 years ... perhaps longer.

It's a bit complicated ... so bear with me.

For your consideration.

Mike

Michael M. Dunn, Lt Gen (Ret)
President/CEO




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First, the combat requirement is determined. How many orbits do we need? How many Air Expeditionary Forces (AEF) do we need? How many "wars" do we plan to fight? This is basically taken from the defense strategy.

In this example, let us say we have 10 AEFs (which we do) and need one squadron (24 aircraft) per AEF. That means the required operational fleet size is 240 aircraft [assuming none is needed for other missions ... like Air Defense of the US]

In addition to the operational aircraft, we will need initial-training aircraft for the pilots/crews to learn fly. This amounts to 25% of the total operational aircraft. Total number needed is now 300 aircraft.

Next, we need test aircraft for developmental, initial operational, tactical (weapons, computer changes, etc) testing. We also need aircraft for our maintenance school to conduct initial maintenance training. This is usually 5% of the total ... but these aircraft sometimes never get to an operational configuration. Total number needed is now 315 aircraft.

Next, we plan for a certain number of aircraft to be in depot maintenance, modifications, inspections and repairs. This is usually 10% of the total. Total number needed now is 347 aircraft.

Finally the AF calculates aircraft service life ... generally in the 25 year time frame. This coupled with an expected accident rate and a wartime loss rate ... tells us we need a few aircraft extra to take the place of those which are lost in accidents. This category is Attrition Reserve. This is usually 10% more. Therefore in our example 240 operational aircraft turns into a fleet size of 381 aircraft.

This number should sound familiar. It is the number the Air Force says ... and DOD admits ... is the required number of F-22s we need. If you use the OSD number of 183 aircraft and back out the factors ... you can see they started with 115 operational aircraft - which is not even half of a squadron per AEF. Plus it does not allow any aircraft for Air Defense of the US. Clearly it does not meet the operational requirements nor the strategy. Nor does it permit the Air Force to operate in sufficient numbers to do its job.

- Cost: There are 5 major costs.

First is R&D Costs. These are spread over the entire buy of aircraft. Thus if you buy 2500 aircraft, the R&D costs will be spread over lots of airplanes. Fewer numbers means very high component of R&D ... such as with the B-2.

Secondly there is Flyaway cost. This is the actual cost to manufacture the aircraft. It begins very high for the first aircraft and then gets lower and lower for each additional aircraft ... down a fairly-well known learning curve. There are a lot of factors which help the AF get the most for the taxpayer's dollar. Three important ways are: (1) order a large number of aircraft ... which permits the manufacturer to buy tooling to make the process efficient (2) commit to a multi-year procurement ... which permit the manufacturer to make economic order purchases on items it needs to buy and permits a longer-range planning of the labor force and (3) limit the changes the Congress/and or DOD/AF make to the numbers to be bought and to the design.

Thirdly, there is acquisition cost. This is basically the cost to fight the aircraft. It includes spare parts, ground equipment, training, etc.

Fourth is the program cost. This is the total cost of everything needed for the aircraft ... to include hangers, squadron facilities, weapons, spares, etc

Fifth is the life cycle cost. This is the total cost of the program plus the costs to fly, maintain, and operate the fleet - to include modifications, depot costs ... everything - over the life of the weapon system.

Cost ... even more complex is the type of dollars in the cost. Basically there are two sets of dollars. The first are constant year dollars ... where inflation is taken out of the equation. Usually, the Air Force uses the year of the IOC of the airplane. But ... this approach misses the fact that in the Aerospace industry, costs don't always follow the CPI. In fact, with the shortage of engineers, it costs the industry more than just inflation to keep their work-force together. Critics sometime use constant year dollars ... but use the year as the present year ... or a future year - which results in higher numbers. The second type of dollars is then-year dollars. This is the sum of all the monies that Congress appropriates for a system - regardless of inflation or any other factor.
Why is this important? One way to try to kill systems is to cut the number of aircraft you need ... which spreads the R&D over fewer A/C ... and changing the buy raises the flyaway cost because the tooling, plant and equipment are amortized over fewer aircraft. Thus if you cut the buy, the aircraft "cost more" which ... in the minds of the critics, means you should cut even more. Another way is use the cost data favorable to help you make your case to cut aircraft. You use Program Costs in then-year dollars - which is the highest number that can be proven [LCC are estimates]. In reality, the decision policy makers and Congress face is deciding how many aircraft to buy ... and the best data to use is Flyaway cost - because that is the marginal cost of the next aircraft off the line.

Confused? It can get worse ... but you should always be suspect of anyone telling you how much a system will cost ... especially as DOD has done when they compare the cost of an F-22 with that of an F-35 ... which won't go into production for the AF until 2013. Not only will the cost rise ... but what you don't know is: A lot of the R&D cost of the F-22 folded into the cost of the F-35 ... and ... was "free" to the F-35 program.

We are seeing these types of factors at play today. Listen and read closely and you can see them yourself.





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