Tag Archives: Department of Defense

Augustine’s Laws and the future long-range bomber

The US Air Force is moving ahead with its plan to develop a new long-range bomber aircraft to be operational by the mid of next decade. The program is not yet launched, but within this year it is expected that we will see the launch of a request for proposals (RFP).

I read about the latest moves about this program-to-be in an article from DefenseNews, “USAF To Shed Light on ‘Mystery’ Plane“. Apart from different declarations from officials and industry, the article provided some main general clues:

The Air Force intends to begin fielding the bomber in the mid 2020s, with penetrating capability in mind. The service will procure 80 to 100 planes, which will mostly be made with existing technologies. Those machines will also have both standoff and direct-attack munitions and room for a large payload.

The service also is exploring the idea of the aircraft being optionally manned.

Service officials have cited a cost of $550 million per plane as the ceiling for the program, but even that figure has some mystery to it. Observers have noted that the figure does not include research and development (R&D) costs, which could drive that amount up.

My first reaction on that figure of $550 million per aircraft was:

For those not acquainted with him, Norman Augustine served in many positions both in the Administration (Under Secretary of the Army) and in the Aerospace & Defense industry (CEO of Lockheed Martin). Lately he lead the Committee that was reviewing the US Human Space Flight Plans. He wrote a fantastic book, “Augustine’s Laws”, about the aerospace and defense industry, the problems that plague their programs, etc. I reviewed that book in this post.

However, after writing that tweet I decided to check it myself…

See below the original graphic from the book depicting the trend of increasing costs of bomber aircraft:

Trend of Increasing Cost of Bomber Aircraft (source: Augustine's Laws).

Trend of Increasing Cost of Bomber Aircraft (source: Augustine’s Laws).

I extrapolated the trend with the information provided in the article, that is, a $550 million unit cost with an entry into service by the mid 2020s, see below where that spot is in the enlarged graphic:

Updated Trend of Increasing Cost of Bomber Aircraft (source: Augustine's Laws + future long-range bomber information).

Updated Trend of Increasing Cost of Bomber Aircraft (source: Augustine’s Laws + future long-range bomber information).

You will see that I marked 2 different spots in red and blue. The blue one corresponds to the unit cost ceiling of 550M$ reported in the article. You will see that the spot is way off the 70-year old trend (from the end 1920s-1990s). Therefore, I decided to continue the trend line and see at what unit cost would a bomber aircraft with entry into service in the mid 2020s still follow the trend, and I marked that unit cost in red. The result is that the future bomber would have to cost about $500 billion apiece, or a cost roughly equal to the entire Department of Defense yearly budget.

That may seem impossible today, completely off reality. How could that happen? Start by imagining that the budget which will be earmarked for 80-100 airplanes along several years, in the end serves to procure many less units (40?, 10?… 1?). Then, add to that the information appearing in the article accompanying the 550M$ figure, “the figure does not include research and development (R&D) costs, which could drive that amount up”. Put all that together and we might end up seeing, 10 years from now, that Augustine’s was right on the spot.

In fact, the assertion that one single airplane would cost the US Air Force the entire DoD yearly budget was exactly predicted by Augustine in his Law number IX, though he applied it for tactical fighter aircraft, and the date in that case would be a bit later, 2054:

In the year 2054, the entire defense budget will purchase just one tactical aircraft. This aircraft will have to be shared by the Air Force and Navy 3 1/2 days each per week except for leap year, when it will be made available to the Marines for the extra day. (LAW NUMBER IX)

Update (2014-03-08): See in the article from Bloomberg, “Long-Range Bomber’s Development Would Get $12 Billion“, a declaration from Lt. General Charles Davis: “Is it going to be $550 million a copy? No, of course it’s not going to be $550 million a copy once you add in everything.“. The article includes further figures providing a new estimate of 810M$ apiece… The closing of the gap between 550M$ and ~ 500bn$ has started.

1 Comment

Filed under Aerospace & Defence

US Foreign Military Sales

The Foreign Military Sales (FMS) is a program managed and operated by US Department of Defense (DoD) on a no-profit and no-loss basis. Countries and international organizations participating in the program pay for defense articles and services at prices that recoup the actual costs incurred by the United States. This includes a fee (currently 3.8% of what the defense articles and/or services cost, in most instances) to cover the cost of administering the program.

Foreign countries may also opt to procure directly from American contractors in Direct Commercial Sales, though FMS ensures third countries rates similar to those received by the DoD (bargaining power) but the items will be the standard procured by the USA, not especially tailored to the needs of other countries. In any case the sales will have to pass the same approval requirements for the sale of defense materials to third countries.

The Defense Security Cooperation Agency (DSCA) is the one managing this program and the one which publishes the different deals (Major Arms Sales Notification and FMS Contract Awards).

The DSCA also publishes historical data of the FMS sales by year and per country and region. (I have always admired the openness of the different US agencies in their publishing of data to work with).

In the graphic below you can see the total US arms sales agreements with foreign countries and FMS-program agreements during the last 40 years.

Total Military Sales (*) and FMS-program agreements (in k$) per year.
[(*) Total Sales includes foreign sales not made through FMS program]

You can see how most of the agreements are close within the FMS program, which ensures moderate costs to the third countries and a standardization for US allies. You can notice as well how the first Gulf war and the recent wars in Irak and Afghanistan have increased FMS agreements.

However, given that military equipment takes time to build, there is a lag between those sales agreements and when the arms are delivered. See below the two lines representing FMS agreements and FMS deliveries (both in k$).

FMS (in k$): agreements vs deliveries per year.

You can see how the deliveries show a growth trend since the 1970’s, with peak at the end of ’90s.

The following question is: to which countries were those sales…

FMS Sales (1950-2010) per region.

I will end this post with this graphic, showing how the Middle East (“Near East & South East Asia”) is the region which received the most of FMS during the last 60 years. In a following post I will dive into which specific countries as that is a very interesting analysis deserving a single post.

4 Comments

Filed under Aerospace & Defence