Multiyear Raptor procurement deal nearly complete
May 4, 2007
Michael Fabey/Aerospace Daily & Defense Report
The Air Force and F-22 Raptor contractors team is only a couple of weeks away from completing negotiations for a multiyear procurement contract that could serve as a foundation for additional aircraft buys beyond the deal and become a template for other similar deals.
The multiyear deal will provide the promised $225 million in savings over the proposed three years, Maj. Gen. Jeffrey Riemer, the new Raptor program executive officer, told the Daily May 2 in his first media interview in his new job.
RAND evaluators are being brought in to scrutinize the procurement plan, Riemer said. Pentagon officials should begin their review in the first part of June to certify that the procurement strategy complies with appropriate laws and policies.
After that, the procurement plan will go to Congress for its review.
While one of the elements of the multiyear plan is to prolong Raptor production to make a bridge for the next fifth-generation U.S. combat aircraft - the F-35 Joint Strike Fighter - the long-term procurement plan will rise or fall on its ability to cut costs, Riemer said. It's been priority one for him since taking over in January, he said.
"We have to show the savings," Riemer said.
And the continuing question in Congress and some circles of the Pentagon is whether the cost savings being generated are enough.
"This whole summer people will be discussing the criteria and the savings," Riemer said.
It's been difficult enough, he said, to mold a multiyear plan for about five dozen aircraft in so short a time. Usually, a single contract has taken twice and even three times as long.
At the same time, he said, the Air Force and contractors have had to forge a single-year, single-lot deal in case the multiyear falls through, he said. That proposed deal will be ready for review at the same time as the multiyear.
To work out the simultaneous contracts, the Air Force and contractors had to work out projected rate adjustment clauses - no easy task with rising raw material prices.
Riemer would not disclose how much the multiyear per-Raptor costs would be.
However, the Air Force has listed the flyaway costs for Lot 6 aircraft at $138 million.
And, according to a DAILY analysis of DOD fiscal year 2008 budget request numbers, the average cost for 20 aircraft would be about $193 million per Raptor.
F-22 critics point out that the aircraft was supposed to cost only a fraction of that amount when the aircraft was being developed through the 1990s. The program acquisition cost per plane is nearly a third of a billion dollars.
But Riemer points out the program per-plane costs are based on the Pentagon-imposed 183 budgetary cap - about half the number the Air Force says it requires, and only a fraction of the 750 the Air Force initially was supposed to get.
Getting and keeping to the terms of the multiyear plan - and making sure the F-22 does the job it's meant to - should help the Air Force to get more than 183 Raptors allotted, Riemer said.
The average per-Raptor flyaway cost for the 183 total is about $159.9 million. For 750, the service says, the cost could be about $58.9 million, based on a base year 2005 price.
This post has been edited by pfcem: 04 May 2007 - 1241 PM

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