Thanks to T Rob for the link!
via Motley Fool
According to the military hardware experts at BGA-Aeroweb, the average flyaway cost on a Boeing (NYSE:BA) F/A-18-E/F Super Hornet fighter jet is $60.9 million. Upgrade that warbird to an electronic warfare specialist like Boeing's EA-18G Growler, and you can expect to pay much more -- $80.4 million per copy.Nice. Very nice. Interesting that the market place is finally working for defense. Perhaps the govt needs to get into the business of designing its gear and then taking bids to construct it instead of leaving it to the manufacturer's. That way if say BAE charges too much for an ACV we can bid it out and SAIC can win the contract. I'm not sure but wasn't that once done with shipbuilding and aircraft?
But has Boeing got a deal for you! And by "you," I mean the U.S. taxpayer.
Late last month, in its daily digest of contracts awarded to its favorite defense contractors, the U.S. Pentagon announced that it has just placed an order with Boeing to deliver to the U.S. Navy "seven Lot 40 EA-18G aircraft and associated airborne electronic attack kits and five F/A-18E aircraft." Going by BGA's prices, you might expect an order of this size to set the Pentagon back a good $867.3 million. But in fact, the Pentagon says this entire order for 12 brand new fighter jets is going to cost it only $678.7 million -- a $188.6 million savings on the sticker price.
That's a big savings for the taxpayer -- about 22% below list. Indeed, even on the off chance the Pentagon forgot to include the $119.4 million cost of the 24 F414-GE-400 engines manufactured by General Electric (NYSE:GE), which are essential to the operation of the planes, that price would still be $69.2 million below the price you'd ordinarily expect these planes to cost, based on the price Boeing quoted. Even in the unlikely scenario where the Pentagon is ordering airplanes from Boeing in one contract and their essential engines from General Electric in another, Boeing would still be giving the Pentagon a not inconsiderable 8% discount off of its list prices.
How is that we could have so many different plants building the same tank, ship or airplane during WW2? However it was done we might need to get back to it.