Over the past year, the Defense Department has been able to drive down procurement and operations and sustainment costs of the F-35 joint strike fighter, but a decision to extend the aircraft’s service life to 2070 erased those savings and added an estimated $16 billion in 2012 dollars to the overall program cost, the F-35 joint program office has said.

The department originally planned to fly each joint strike fighter about 300 hours a year, but the Air Force scaled that back to 250, according to the department’s 2015 Selected Acquisition Report (SAR) sent to Congress on Thursday. That extended the 80,000-flight-hour service life of the F-35A by about six years and increased O&S costs by $45 billion overall, said Air Force Lt. Gen. Christopher Bogdan, the F-35 program executive officer. 

Additionally, all F-35 users, including the Marine Corps and Navy, increased their total flight hours in their beddown assumptions, which also contributed to the $45 billion increase, the SAR  stated. The Air Force added 1.3 million flight hours while the Department of the Navy increased the use of F-35Bs and Cs by a combined 300,000 flight hours.

That sum was partially offset by a $7.5 billion drop in procurement costs and a $22 billion reduction to O&S costs, including a 2 percent to 4 percent decrease per flying hour depending on the variant, Bogdan told reporters during a March 24 press conference.

Despite the uptick in O&S, Bogdan argued that the program had a good year in terms of cost savings.

“We’re making real progress,” he said. “The maturity of the airplane is getting better. The maintenance of the airplane is getting better. … The reliability of the airplane, of all three variants, is coming up steadily.”

Today, the F-35 has a 56 percent aircraft availability rate and a 79 percent mission effectiveness rate, which measures how often pilots complete their missions, he said.

“The reason why the cost went up in O&S is because of an assumption, and the real costs actually went down,” he added. “We had a real decrease in cost this year. RDT&E [research, development, testing and evaluation costs] stayed the same. Procurement costs went down. Real O&S costs went down. For a program that has had a tragic past, that is not a bad report card from 2014 to 2015.”

According to the SAR, the estimated procurement costs for the life of the program have dropped by $7.5 billion in 2012 dollars due in part to revised estimates of spares requirements and to block buy and multiyear procurement assumptions.

The drop in procurement costs also reflects the “price curve coming down quicker” than anticipated and the fact that the joint program office is “negotiating better than what our original estimates said,” Bogdan said.

Compared to the 2014 report, the F-35 unit cost decreased by about $1.8 million per jet for the Air Force’s F-35A, $1 million for the the Navy’s F-35C and $700,000 for the Marine Corps F-35B variant.

A transfer of $300 million from procurement to the RDT&E account resulted in no net increase for the program. The funding was moved to RDT&E after service comptrollers specified that certain modifications to operational test aircraft should be included in development costs, Bogdan said.

Military construction costs, which are not overseen by the F-35 program office , rose by $200 million, the report said.