F-16s at Any Price

The actual parameters of the deal for our future warplanes have remained foggy.

The price is unlikely to reach the financial ceiling of 2.9 billion Bulgarian leva, (approximately $16 million) but will surely be above what is expected.

An envelope is expected to arrive in Sofia in the next 10 days. It will contain the U.S. proposal for an international agreement to purchase eight multitarget combat aircraft F-16 Block 70/72 planes and the outfits required for them. The documentation for this was approved by the U.S. State Department on May 30 and submitted to Congress for a final vote. It was clear from an announcement made by the Defense Security Cooperation Agency and published Monday night, that the vote must take place within two weeks. It is not certain yet what sort of information the envelope will contain.

The future fighter jets for the Bulgarian Air Force, however, will hardly cost 2.9 billion Bulgarian leva, which might have been the impression one would have had over the past few days. The Defense Secuiryt Cooperation Agency announcement indicated that “The State Department has made a determination approving a possible foreign military sale to the government of Bulgaria of FF-16C/D Block 70/72 aircraft with support for an estimated cost of $1.6 billion. This naturally left the impression for most people that the price for the eight U.S. airplanes had jumped to 2.9 billion Bulgarian leva — which is 1 billion Bulgarian leva more than the initial amount approved in the Bulgarian Parliament project budget, exceeding the amount of 1.8 billion Bulgarian leva with VAT. This is not the case, but the final bill will surely exceed the amount that was expected.

How Much Are We Going To Pay?

Practically speaking, the number is, in fact, the ceiling price, the amount which the military agreement can reach. Setting such broad limits is standard practice for the United States in cases where the sale of weapon systems is involved under the Foreign Military Sales program, as this provides flexibility depending on the wishes and financial capabilities of allied countries.

“The Departments of State and Defense allow for a margin in all notifications in the event foreign partners expand the scope of the program beyond what was initially requested. This avoids the need to amend a Congressional Notification and reduces the time it takes to complete a foreign military sale, according to the U.S. Embassy in Bulgaria.

The embassy also added that “Congressional Notification for the F-16 sale to Bulgaria lists the cost of the program at $1.6 billion, but this is not the final price. The program’s actual final cost will be based on the final Bulgarian requirements.”

“The price for the F-16 airplanes that is currently being negotiated between Bulgaria and the U.S will be significantly lower than the ceiling,” U.S. Ambassador to Bulgaria, Eric Rubin, confirmed on Thursday.

“Bulgaria’s final requirements became more or less clear from the official announcement by the Defense Ministry, which was obviously prepared for the shocking $1.6 billion price tag.

“A two-week period will commence within which the U.S. government will provide the Bulgarian government with a draft contract in which the expected price for acquiring the eight airplanes with a package of necessary combat equipment will be within the $1.2 billion range,” announced the Bulgarian Defense Ministry announced. “In my opinion, around 2 billion Bulgarian leva is the maximum reasonable price,” Defense Minister Krasimir Karakachanov later specified, lowering the price by another 100 million Bulgarian leva.

In order to dispel fears Krakachanov cited the Slovakia, which is currently buying 14 F-16 Block 70/72 planes. “The Congress voted that Slovakia should agree to $2.8 billion and the Slovaks signed a contract for $1.8 billion,”the minister told Bulgarian National Radio.

’Bit by Bit’ Aircraft

Even the potential price that Karakachanov quotes far exceeds the price approved by Parliament. Thus, the most important question is: what exactly will the government decide to cut from the agreement so the discrepancy doesn’t appear so dramatic?

Most likely the first aircraft will be delivered with only a moderate amount of equipment and weapons, enough for drills and airspace defense missions. (Ironically this is the same situation that occurred when the competitive Gripen aircraft was rejected.) Probably most of the combat equipment, especially for “air – land” missions, as well as for future logistical services will be delivered at a later time under possibly separate contracts.

Only in this way will the difference between the estimated price and the actual price be less shocking, and acceptable to taxpayers once it is explained geostrategically.