WASHINGTON — Boeing is challenging the Danish government's recommendation that Denmark select Lockheed Martin's F-35 for its next-generation fighter fleet, claiming that the Danes used flawed data to determine the cost of each plane.
Boeing Vice President Debbie Rub told a Danish parliamentary committee in a private hearing Thursday that the recommendation that Denmark buy 27 F-35s to replace its aging F-16 fighter fleet was based on "incomplete and possibly flawed data," the company confirmed to Defense News. The news was first reported by Reuters.
In a detailed analysis of the type selection for Denmark's new fighter, the Danish government pegged the overall procurement cost to buy 28 F-35s at $2.33 billion, or $83 million a piece. By contrast, it determined the number of Boeing's F/A-18 Super Hornets they would need to complete the same mission over 30 years is 38 aircraft, and calculated the overall cost to buy those jets at $4.65 billion. This works out to a unit cost of about $122 million.
A Boeing official challenged the accuracy of this pricing information, saying that the Danes included the cost of some of the first five years of sustainment and training for the Super Hornet in calculating the upfront procurement cost, but did not do the same for the F-35.
It's also worth noting that the figures cited in the Danish analysis are significantly different from the Pentagon's own estimate for flyaway unit costs of both jets. According to the fiscal 2017 budget request, an Air Force F-35A costs about $99 million in FY17, and about $101.5 million in FY18. The same budget documents show the Super Hornet costs $77.8 million in FY17, and $78 million in FY18.
This cost and pricing information is "puzzling," according to Boeing spokeswoman Caroline Hutcheson.
"Boeing met with the Danish Parliamentary Defense Committee today to share a number of concerns with the new fighter program recommendation released last week, specifically about puzzling cost and pricing information in the report," Hutcheson said Thursday. "We hope parliament will examine these issues closely before making a final decision."
Boeing also took issue with the Danes' determination that Denmark would need to purchase 11 more Super Hornets than F-35s to complete the mission. The type selection analysis pegged the Super Hornet's service life at 6,000 hours, while noting that the F-35 can fly to 8,000 hours. Boeing thinks the right figure for the Super Hornet is 9,500 hours, the company confirmed.
In addition, Boeing submitted cost information on both the two-seat Super Hornet and the one-seat version, but the single-seat jet was not included in the final evaluation, according to one company official. The F-35 is a single-seat aircraft.
Teal Group analyst Richard Aboulafia also expressed skepticism about the Danes' pricing information for the Super Hornet. Boeing could have priced the Super Hornet for future years when the production line is dwindling, and asked for more overhead to cover the cost of keeping the line open — but that explanation is not likely, he said.
It's also possible the decision was politically motivated, Aboulafia noted.
"I see every reason for Denmark to select the F-35 given what Russia is doing right now," Aboulafia said.
The Danish defense ministry has committed to a public debate period of about two to four weeks before the final parliament decision, according to sources familiar with the negotiations.