Drones and Trenches
For less than $1 thousand a pop, Ukrainians are taking out Russian tanks costing $3 million. For less than $300 thousand a pop, they are taking out Russian warships costing $ billions. Ukraine is doing these things with homemade cardboard drones, store-bought drones, and their roll-your-own mostly-submerged drones. Ukraine’s TLK-150 and TLK-400 submersible drones with 700-1200 mile ranges and up to 500 lb payload cost around $250k apiece.
One US cruise missile costs about $2 million; its launch platform is likely more than $1 billion. A patriot missile costs about $4 million; the launch platform $10 million. Each High Mobility Artillery Rocket (HIMAR) costs around $170 thousand; the launcher, about $4 million. US drones like those being used in the Middle East typically range from $700 thousand to $70 million; may even run as high as $400 million. Today, an F-35 single-seat, single-engine, all-weather stealth multi-role combat aircraft runs about $75 million.
This session, a bipartisan group of senators has introduced a bill, Audit the Pentagon Act of 2023, calling for defense spending audits. The Senators think that defense contractors’ profit margins may be around 40%. (In a world where it is get the bid and let extras do the rest, surely, they meant 140%) . Best Buy will sell you a PlayStation Controller for less than $500. Lockheed will make the Navy one for $5 million.
It works something like this*: Lockheed Martin wins the project with their $100 billion bid. Winning the contract gets them in the door; has little or nothing to do with the final cost. The final cost might be $300 billion. Next, the project enters the extras stage. Henceforth, Lockheed is playing with house money. All Lockheed Martin personnel assigned to the project ‘bill’ their time to the project and then Lockheed Martin bills the Defense Dept. It’s cost plus from here on out. Say Defense allowed Lockheed Martin 20% profit. 20% of $100 billion is $20 billion; 20% of $300 billion = $60 billion. That’s 60% profit on the original bid. Since Lockheed is playing with house money, the Defense Dept. pays the wages and salaries of the workers and engineers assigned to the project for an additional 5, 10? years. There is, of course, a few percent added on for overhead and profit on the house money.
For Lockheed’s workers and engineers, a bird in hand is worth two in the bush. Especially if one bird is in Southern California, the other in Seattle, or one is in South Carolina, and the other in Alabama.
And, where are the salaries of the retired Admirals and Generals getting billed to? The Audit the Pentagon Act of 2023 seems worth the wait.
Back when, the Economics Professor taught us about cost-plus contracts using the example of machine screws and bolts used in dam ballasts during the Great Depression. All defense contracting is essentially cost-plus, which means that, for the vendor, the higher the costs, the better. The US pharmaceutical manufacturing is another example. The more a pharmaceutical spends on research, labor, marketing, and management salaries, the more they charge for their products. 20% of a lot more is a lot more than 20% of what it could have been done for. Cost plus is compounding, if you will.
*Petite Disclaimer: During the early 1980s, I did perhaps a dozen control systems for Lockheed at their Sunnyvale facility (then Lockheed Missile and Space Company, as I recall). I got to know several of their engineers quite well — their politics — to see the inter-workings. In the mid-1980s, a patent of mine for wave energy capture competed with their ‘Dam-a-Toll’ for federal research funding. They won. All in all, it was a lesson on how defense contractors work.
Minds think alike. I was planning to write on drones and how they make existing military technology obsolete. Really honest I was about to write that (this?) post.
In any case, we agree.
Go for it! Reagan brought back the obsolete since before WWII battleships. Now Putin brings back tanks and trenches.
I see you have personal expertise and focus more on cost-plus than on the technology.
I’d add that I guess that the cost of the new F-35s will be smaller than F-35 maintenance (I think also in present discounted value). I recently read that an F-35 on average gets 11.2 hours of flight time before requiring critical mainenance (as in otherwise the plane might go missing like the one recently lost in S Carolina).
“The most recent all-inclusive cost per tail per year for the F-35—fiscal 2021—was $4.1 million for the A model, which the Air Force uses; $6.8 million for the F-35B short takeoff vertical landing version; and $7.5 million for the carrier-capable F-35C model.”
we have an over 10% of the cost of the plane for the F-35C — per year. discount 5% real. Lifetime of plane 14 years, as much on maintanence as initial cost.
In contrast the cost of suicide drone mainanence is zero. It’s perfectly OK for 10% to fail (or half to fail) reduces costs many fold compared to a guy might die if it fails.
oops $38 billion more for maintenance due to a miscalculation
https://www.flightglobal.com/fixed-wing/overtaxed-f-35-engines-rack-up-38-billion-in-extra-maintenance-costs/153528.article
GAO looked at F-35 “mission capability” rates. They found that it averaged 55% of the possessed aircraft could do part of the functions the aircraft is supposed to perform.
They neglected to state the “full mission capable” rate. That would have been more embarrassing, likely less than 40% of F-35 are available that could do all the functions it was sold to do.
Good thing the new Chairman of the JCS is an F-16 pilot and used to things not working when needed.
The acquisition of F-35 is nearly $400 billion, it needs billions in updates because most technology is obsolete due to delays, and the engines run too hot.
Total F-35 life costs will be over $1.3 trillion and I am probably using an old underestimate.
oops missing link on cost per tail-year https://www.airandspaceforces.com/lockheed-martin-says-f-35-sustainment-costs-have-fallen-by-half-another-35-percent-coming/
Cost plus during development make some sense, the contractor does not want risk. But the government rarely has the sense to walk from a bad project, F-35 development had 99% over run, if fixed price Lockheed would have had to write huge change proposals!
Fixed price should.be for production, but usually that has huge changes to save Lockheed.
DoD history shows operating cost range twice acquisition costs over life, not including updates and life extensions.
Advertising about support for flight hour declining need a lot of salt.
Run through aviators becoming pedestrians in S Carolina.
at the end of the day Russia holds more land than any other country, land that cannot be weaponized; whereas the United States owns the United States Space Force. we hold the trump card. Then why does Russia persist at trying to get more useless land when they already have ports on the Pacific Ocean, the Arctic Ocean, and the North Sea? they need a war of attrition to allow the Ukrainians to kill off Russian undesirables. all we have to do is teach the Ukrainians how to use most of our weapon systems then give the Ukrainians enough ammunition to get the killing over with; so that the Russians in control will withdraw the rest of their forces from Crimea and other parts of Ukraine, hoping that Ukrainians will not follow them home.
So what do we have to look forward to? In a couple years there probably will be hundreds of Ukrainians with outstanding drone skills with seriously reduced prospects for prosperity in their own country and also some hefty grudges against all kinds of counties, most definitely including the USA.