What are THEY thinking about?

Or Why is the United States Stimulating the German Economy?

What are THEY (Department of Defense just in case you do not know who they are, not to be confused with THEM a bunch of giant ants in the desert of New Mexico) thinking about when it comes to stimulating the German Economy to the tune of at least .75 Billion Dollars to replace the primary United States Armed Forces medical facilities in Europe LARMC (Landstuhl Region Medical Center)?

LARMC is still operational.  Given that there is an overall force reduction currently taking place in all armed services.  The operational tempo down range (Afghanistan) is dramatically being reduced daily (You know we are wining the hearts and minds of the Afghan people, just like we did in Iraq, it is almost time to declare victory and leave, God knows that many of our Allies have.).  Given the mood of the Senate and their reluctance to keep US Forces in Afghanistan after 2014, the observed reduction in operational tempo may be even further reduced.  The reduction of forces forward deployed in Europe (2 Infantry Brigade Combat Teams (170, and the 172) disbanded in 2012).  The Department of the Army downgrading of United States Army Europe USAREUR commander slot from a General O-10 to a Lt. General O-9.  The current USAEUR actions to consolidation and or reduce the number of United States Army Garrisons in Europe.  The Department of Defense plans to pivot of our forward force structure from being concentrated in Europe to being concentrated in the Pacific.  Further announced reduction of personnel in Europe (Lajes Field reduction have just been announced, and the Portuguese government is not happy.  After the Portuguese government the United States is the largest employer on the island.).

Given all of the above, why is it that the Department of Defense, and more particularly the Department of the Army is trying to spend at least $750,000,000.00 ($ 750 Million, or $ 0.75 Billion) on a replacement facility for the Landstuhl Regional Medical Center?  (Replacing the facility did make sense with are past operational tempos in Iraq and Afghanistan, because it was busting at the seams.)  More importantly do THEY really think that they can build a replacement facility for that amount?  Given their track record on other project (pick on any one) and the current currency conversion ratios it is looking rather questionable. Additionally all constructions that take place on the local facilities has to be funnel through a single German corporation, we promise that we will get you the best price.  Look at the mess that was the KMCC.  To date the Department of the Army has a Total Obligation Authority of $197,592,000.00 or $197.595 Million Dollars.  Next years numbers are not out yet, that will be sometime in February 2013, and I can hardly wait.

It will also be a game of bait and switch, if the new hospital is built, at Rhine Ordnance Barracks (ROB), the next thing you will hear is that there is not enough supporting facilities at ROB, and that these facilities which existed at Landstuhl will have to be recreated at ROB to provide the same level and ease of support.  Surprise that will be at least another Billion Dollar shot into the local German economy.

Yes the current facility is old, but it is paid for.  Yes it separated from either of the two major DOD facilities located in Kaiserslautern.  Yes that makes more expensive to secure, but because it is separated, all of our eggs are not in one basket we do gain some security via separation.  If a foreign power wants to take the facilities out they (not the DOD) will now require the use of a large force structure to accomplish the task.  Larger force structures are harder to hide.  Attacking multiple targets, and being successful requires higher levels of execution, higher levels of coordination, higher levels of communications, and as stated earlier a much larger force, and the job does not scale linearly, it is exponential.

Remember Pearl Harbor, it was harder to guard all of the aircraft dispersed in their revetments, and harder to destroy aircraft in their revetments from sabotage, so General Short ordered all of the aircraft pulled from their revetments and lined up on the flight line, that way it would be easier to guard, and consequently easier to be destroyed by a concentrated attack.  The IJN air staff and strike leaders were pleasantly surprised when they discovered most if not all of the United States Army and Navy air assets neatly lined and boxed together at Naval Air Station Ford Island, Naval Air Station Kaneohe, Marine Corp Air Station Ewe, AF Bellows, AF Wheeler, AB Hickam.

One reason for the proposed consolidation is that operations and maintenance and security at these spread out facilities is expensive, and this is one way to reduce these re-occurring costs.

If the Department of Defense/Department of the Army with the blessing of the United States Congress is so dead set about spending this money, why not spend it somewhere back in the United States Where the Pork would help some congressman in his up coming election in two year?  Why are we the United States going to drop at least three quarter of Billion Dollars into the German economy?  Why are we stimulating the German economy?  Why are we not stimulating the United States economy?  I ask one question to members of the House and the Senate why is this pork not being kept at home?  Are large numbers of German citizens now voting for members of the House and Senate and they must be repaid?  Is this the United States way of paying German for the use of their troops in Afghanistan?  What are THEY thinking about?   It is not too late to stop.

So what is the cost to lose a F-22 in an accident?

How do you calculate the cost of a F-22?  Do you take the total funds spent by the Department of Defense on the program divided by the total number of airframes delivered to the United States Department of the Air Force?  The number of airframes 187 is a fairly easy number to determine, with the last being delivered in May 0f 2012.  With this last lost of an F-22 11/15/2012 we now only have 184 airframes.  Airframes were lost in 2009 and 2010.  The total program costs of the program well not quite as simple to determine as one would suspect. One estimate of the development and productions cost of the program was $67,300,000,000.00 Dollars ¹.  This number included the cost to develop the aircraft, establish the infrastructure to support and operate, and to actual purchase the 187 completed airframes, it does not include any follow on spending for maintenance, spares and or upgrades.  The program was sold as a “single step” program meaning that it was felt by Department of the Air Force leadership and Lockheed Martin that there would be no need for significant future modernization, as if time would stand still for this weapon system.

By December of 2011 the Department of the Air Force proposed that estimated costs to modernize F-22A at $11,700,000,000.00 Dollars.  Note Lockheed Martin had not delivered the last airframe to the Department of the Air Force.  That airframe in fact had just left the production line in December 2011, but it would not be delivered until May 2012.  How fortuitous for Lockheed Martin that a follow-on modernization program for the F-22A was in place that original “single step” program somehow morph to the traditional multi-step programs of old?

Of the $11,700,000,000.00 Dollars projected modernization cost with $5,500,000,000.00 Dollars having been spent.  With $6,200,000,000.00 Dollars committed for several major follow on programs.

So just how much does one F-22A cost?

The Development and Productions Cost version of the number is $359,893,048.13 Dollars per airframe.

The Development and Production Cost plus Modernization Costs to date version of the number is $389,304,812.83 Dollars per airframe.

The Development and Production Cost plus actual and budgeted Modernization Costs version of the number is $422,459,893.05 Dollars per airframe.

Survey say’s that at this time the answer is $389,304,812.83 Dollars.

For those who just want easy number to remember, 360 Million Dollars, 389 Million Dollars, and 422 Million Dollars respectively.

So yesterday’s loss of one F-22A at Tyndall Air Force Base just cost the United States 389 Million dollars, give or take a few hundred thousand dollars.

As a matter of comparison, the Internal Revenue service estimates that 239.3 million tax returns will be filed for Calendar year 2012², based on this number it appears that this airframe loss only amounted to $1.63 per tax return that is expected to be filed for calendar year 2012, what a deal for you and me.  So let go out a drop another one into the ground and call it a Starbuck Frap.

Just to add smoke and confusion to the issue, the Department of the Air Forces quote this thing that they call a “Fly Away” cost.  According to theory it should just contain the costs to actually build the airframe.  This “Fly Away” cost does not include any of the cost associated with development, that way they can report that the purchase of airframe is even more of a deal for you and me.

By the way my daughter and I used to get into the argument as to how much the car she wanted actual costs (I was expected and required to pay for it).  For some strange reason she would only report the sticker price, forgetting the tax, title, dealer options, dealer prep, and of course all of the interest that she (I mean that I) would pay.  The two numbers were as different as day and night.  (PS she got a used car that cost $2000.00 drive away, at first she was not happy, but given the choice between a $2000 used car and Shank’s Mare, she decide that the car was not that bad after all, and she that car for kept for 3 years and sold it for $2000 dollars).

¹ http://www.defenseindustrydaily.com/f22-raptor-procurement-events-updated-02908/

² www.irs.gov/pub/irs-soi/12rswinbulreturnfilings.pdf