Breaking the Law
Friday, March 16, 2012 at 12:22PM | Matthew Leatherman Norm Augustine is no stranger to aircraft procurement, or absurd humor. It was with tongue in cheek that the former Lockheed Martin Chairman observed “Augustine’s Law” for how costs grow when the military buys its jets:
In the year 2054, the entire defense budget will purchase just one aircraft. This aircraft will have to be shared by the Air Force and Navy 3½ days each per week except for leap year, when it will be made available to the Marines for the extra day.
The hyperbole contained more than a nugget of truth. The Economist recent updated Augustine’s underlying data and displayed the facts in this very pointed graph. Note that its cost axis increases exponentially rather than linearly.
All of this is well known, including by Air Force Chief of Staff General Norton Schwartz. He responded to it directly in a question on the new “long-range strike” bomber from the Defense Writers’ Group:
DWG: Given what we’ve seen in Air Force acquisitions, how can the Air Force be confident that that’s actually going to be what the plane will cost at the end of the day?
General Schwartz: If it doesn’t, we don’t get a program. That was the guidance of the Secretary of Defense. So either deliver or you’re out of there essentially was Bob Gates’ guidance. I get it. Loud and clear. That guidance still pertains.
In other words, this bomber either is an exception to Augustine’s Law, or its canceled. And, if that’s not bold enough, it’s $550 million per-unit cost plan is just one-fourth that of our last bomber procurement, the $2 billion per-unit B-2.
General Schwartz has laid out a very clear standard for this jet’s acquisition, to his credit, and has also shown an early willingness to make trade-offs in order to maintain that standard. All that’s required to meet it over the long term is a decisive break with aviation history.
Reader Comments (2)
The other requirement is a real mission for a long-range strike bomber.
Matt, thanks for the post. One thing to recall, and is instructive here, if the full complement of 130+ planned B-2s was procured the cost per unit would approximate $550M. But then the short-term fiscal constraints reduced the buy to 70, then 20, and finally resting at 21. Ultimately this drove the cost to $2.13B per unit.
Likewise, many more F-22s were planned originally. So it calls into doubt the relevance of Augustine's Law when many of the development cost mitigations are precluded.
Seems that we could do better by at least acknowledging that these big buy programs like, NGB, F-35, CVN, etc requires a longer-view approach than an annual shift in the purchase allocation/authorization -- especially in light that development is the lions share of the costs.