Mr. Chair, there is a fair amount of historical data that demonstrates that at the very early conceptual stages of an aircraft there is a correlation between the anticipated weight of the aircraft and a rough order-of-magnitude estimate of its cost. That is the basis upon which the PBO estimated the acquisition cost of the aircraft.
The methodology they used, which derives from a private sector company and which the database derives from a private sector company in the U.K., led them to use an assumed acquisition cost of $148.5 million U.S. This was at a time when the joint project office in the United States provided us its best estimate of an acquisition cost of $75 million for the aircraft.
The rest of the PBO's analysis is really quite simple, basic arithmetic. In order to arrive at logistics costs, it multiplies the acquisition cost by a factor by the number of aircraft. It does the same for operating costs.
The key is that if you have the acquisition cost wrong, you're going to wind up with an estimate that is far off the mark. If you get the initial acquisition cost way wrong, your total estimated cost is going to be far off the mark.
Given the assumed acquisition cost in the PBO report of $148.5 million versus the $75 million.... If the PBO had used the $75 million number and had kept all other variables in his methodology constant, he would have arrived at an estimate of $17.2 billion, which is remarkably close to the estimate we had for acquisition and sustainment. That is part of the reason we were led to believe that the PBO's numbers did not include these operating costs.