Better Cost Estimates Needed for Extending the Service Life of Selected F-16s and F/A-18s
http://www.gao.gov/assets/660/650067.pdf

Overall, the Air Force and Navy have about 3,500 fighter aircraft in inventory as of fiscal year 2012, including about 1,020 Air Force F-16s and about 624 Navy F/A-18 A-Ds.The Navy figure includes aircraft that are used by the United States Navy and Marine Corps. Many of the Department of Defense’s (DOD) current fighter aircraft are more than 20 years old on average The Air Force has decided to upgrade and extend the service life of selected F-16s and the Navy has decided to extend the service life of selected F/A-18s. These programs are estimated to cost several billion dollars at a time when DOD is simultaneously facing the competing demands of developing and procuring F-35s at a cost approaching $400 billion, supporting ongoing operations, and implementing $487 billion of reductions over the next 10 years,

The Air Force currently plans to upgrade and extend the service life of 300 F-16 aircraft at an estimated cost of $2.61 billion and the Navy plans to extend the service life of 150 F/A-18 aircraft at an estimated cost of $2.19 billion.Service officials have said that if the F-35 program experiences further delays, the services have the ability to expand the number of aircraft that are included in these programs. In 2009, DOD and the Air Force were directed by statute and a committee report to provide reports on force-structure plans including alternatives such as buying aircraft and upgrading and extending the service life of selected aircraft.The Air Force reported on assessments of seven alternatives, which included buying between 150 and 300 new F-15Es, F/A-18 E/Fs, and F-16s, and upgrading and extending the service life of selected F-16s. The Air Force concluded that the cost for upgrading and extending the service life of current F-16s by 2,000 hours each would be 10 to 15 percent of the cost of procuring new F-16s, F-15Es, or F/A-18s. Extending the life of existing aircraft would provide 6 to 8 years of additional service and, according to the Air Force, provide essentially the same capability over that period as buying new legacy aircraft. The Air Force has stated that without the service-life extension it would have to start gradually grounding some F-16s beginning in 2017.

In response to a statutory requirement, in May 2011, the Navy submitted the results of a cost-benefit analysis comparing extending the service life of existing F/A-18 aircraft with procuring additional F/A-18 E/F aircraft.The Navy assessed six alternatives, which included various combinations of extending the service life of up to 280 F/A-18 A-D aircraft and procuring up to an additional 70 F/A-18 E/Fs. The Navy concluded that extending the service life of 150 F/A-18 A-D aircraft and buying 41 new F/A-18E/F aircraft would provide an acceptable inventory at a manageable level of risk. The Navy’s estimate includes procurement costs for materials and installation to extend the service life of 150 F/A-18s for an additional 1,400 hours each or about 5 years depending on flying conditions. Finally, the Navy’s analysis showed that the 150 aircraft selected for the service-life extension will individually be evaluated for capability upgrades—such as adding the ability to integrate with newer aircraft—as well as upgrades of other critical components reaching the end of their service life and becoming obsolete. After evaluating the aircraft, the Navy will decide whether to do this additional work. Finally, Navy officials said that they could expand their program if needed, to include up to 280 aircraft. Navy officials explained that they will review the service-life extension effort annually as part of an overall review of the F/A-18 program.

מה אומר ה GAO לתחשיבי חהא"א והצי? בגדול הם חושבים התחשיבים מדויקים למדי אבל בה בעת גם חהא"א וגם הצי "הקטינו ראש" ב 2 אספקטים חשובים - הם לא ביקשו הערכה או תיקוף מגורם עצמאי (כגון ה GAO או רו"ח חיצוני המוסמך לעבוד עם הפנטגון) והם לא לקחו בחשבון עלויות משמעותיות נוספות שידרשו במקרה ויהיה צורך להגדיל את סד"כ המטוסים המשודרגים בגלל עיכובים נוספים בפרויקט ה F-35 (במקרה של חהא"א והצי כאחד) או לשדרג מבנית חלק גדול מהמטוסים בגלל התיישנות (במקרה של ה F-18 השחוקים של הצי האמריקני). לא נכתב בה במפורש שהדבר נעשה על מנת להקטין בצורה מלאכותית את עלויות הפרויקטים הללו (ולהפוך אותם ל "קלים יותר לבליעה" ) אבל כן נכתב שההחלטות (בקונגרס) לגבי עתיד הפרויקטים אינן יכולות להתקבל לפני שההשלמות התחשיביות הנדרשות יבוצעו.

However, both the Air Force and Navy estimates were not fully credible due to two shortcomings—the estimates did not show the range of potential costs that are likely to be incurred and were not validated by comparison with an independently developed estimate. As a result, decision-makers do not have visibility of how much the total costs will be and how they may increase if program quantities increase or additional work is required on some aircraft, which could hinder their ability to assess budgets and affordability To improve future updates of Air Force and Navy cost estimates for upgrading and extending the service life of selected F-16s and F/A-18s and to improve the ability of decision-makers to assess the potential total costs, we recommend that the Secretary of Defense take the following four actions:

Direct the Secretary of the Air Force to update its cost estimates, and in doing so:
· include in its sensitivity analysis an assessment of the range of possible costs if the capability-upgrade and service-life extension programs are expanded to more than 300 aircraft including up to the maximum of 650 aircraft, and
· obtain an independent review of the updated cost estimates.
Direct the Secretary of the Navy to update its cost estimates and in doing so:
· include in its sensitivity analysis an assessment of the range of possible costs for extending the service life of other nonstructural components that are becoming obsolete and capability upgrades that may be required for some of the 150 aircraft, and
· obtain an independent review of the updated cost estimates.