Good news: F-35 program decreased by $11.5 billion due to efficiency gains with no reduction in quantities.
GAO: http://www.gao.gov/assets/670/662184.pdf
Bad news: F-35 program is still $107 billion more costly than it was in 2001 and includes 409 fewer aircraft.
GAO: http://www.gao.gov/assets/670/662184.pdf
The recently announced Bipartisan Budget Plan will cut military pensions by reducing annual Cost of Living Adjustments (COLA) by 1 percentage point. Presently, military pensions are adjusted for inflation so that servicemembers maintain purchasing power throughout their retirement. The new proposal will allow inflation to slowly reduce the value of a military retirement.
For example, an E-7 who retires at 20 years of service receives $2,148.40 in retired pay. Under the Bipartisan Budget Plan, by the time this member reaches the age of 62, the effective retirement pay will be $1,761.65 -- $386.75 less per month. Over the course of 20 years, the retired servicemember will lose close to $50,000 in retired pay.
Furthermore, these cuts will affect all servicemembers -- those who are retired and those who are currently serving. This is a significant change to the military retirement system. As the Department of Defense reconfigures to save money, it is important to clearly recognize where the savings are coming from.
It seems that DoD is having a hard time measuring the cost of doing business in IT operations as well.
The goal is to understand how much military services and agencies spend on people, technology and processes, and then use that information to improve decision making and to become more efficient.
Are you surprised that DoD doesn't know how its spending translates into performance?
The Air Force isn't the only service procuring major weapon systems without a clear idea of the long term cost of ownership.
... the Navy may go into a critical decision in 2015 about whether to contract for up to 28 more Littoral Combat Ships without enough understanding of the long-term costs, the evolving concepts to sustain the vessels, or even whether they have enough bandwidth to exchange maintenance data with support facilities ashore.
An article on DoD Buzz about the Air Force's next-generation aircraft states:
Meantime, the operational costs of the F-35 are unlikely to affect how many of the aircraft the service intends to buy, Donley said.
The cost of flying the F-35 “will be slightly higher than the F-16, there’s no doubt about that in my mind,” he said. “I don’t think there’s a link there between projected operational costs and how many we’re going to buy.”
How can there not be a link between what an aircraft costs to operate and the quantity that the Air Force will purchase? Isn't the cost of ownership a key component of fleet composition and size?