Lifetime cost of V-22s rose 61% in three years
Posted Tuesday, Nov. 29, 2011
By Tony Capaccio
Bloomberg News
In three years, the lifetime cost to operate and support the U.S. Marine Corps' fleet of V-22 tilt-rotor aircraft has increased 61 percent, or $46.1 billion, according to a Defense Department estimate.
The 2008 estimate of $75.4 billion has swollen to $121.5 billion, adjusted for inflation, according to a report approved Oct. 31 by the Pentagon's weapons-buying office.
The new figure may increase scrutiny of the Navy's plan to spend $8 billion to buy 122 more V-22s, made by Textron's Bell Helicopter unit and Boeing.
The previously undisclosed estimate stems from increased maintenance and support costs, according to the report obtained by Bloomberg News. The cost model factors in many variables and assumptions for operating the 458 aircraft through their service lives, extending into the mid-2040s, said Col. Greg Masiello, the program manager.
The $53 billion V-22 Osprey is the Pentagon's sixth-largest acquisition program, according to cost estimates from December 2010.
The Pentagon is seeking to trim $450 billion in overall spending during 10 years to meet deficit reduction targets outlined in the Budget Control Act.
Christopher DeNicolo, primary defense credit analyst for Standard and Poor's, said in a Nov. 21 report that the V-22 and its suppliers are at risk for budget cuts.
The Navy, which includes the Marines, is seeking to cut V-22 costs "by pursuing repair and maintenance improvements, maintenance concept changes, and reducing repair turn-around times," the document said.
The Marines also want to buy more parts directly from the original makers rather than from Bell and Boeing "to eliminate contractor pass-through costs," the document said.
The $8 billion in proposed V-22 spending, in the early discussion stages, would supply aircraft to the Marines and Air Force through 2017, renewing a current deal of 174 aircraft for five more years. A multiyear contract almost guarantees that the aircraft can't be canceled because of steep termination costs.
The V-22 is a fixed-wing plane with rotors that tilt so it can take off and land like a helicopter. Bell builds components for the V-22 at plants in Fort Worth and Grand Prairie.
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