Expensive frills: customers blamed for military aircraft sticker shock.

• Author: Erwin, Sandra I.
• Position: WASHINGTON PULSE: NEWS FROM THE INSIDE THE BELTWAY

The justification most often heard for the spiraling costs of military aircraft is that the Pentagon is ordering fewer of them, so they become more expensive to build. But that theory doesn't hold water, says a recent government-funded study.

The Rand Corp. examined cost trends for every military aircraft--patrol, cargo, trainer, bomber, attack, fighter and electronic warfare--for the past quarter century. It found that labor costs have grown only slightly faster than inflation, but the proportion of labor cost in overall aircraft price tags has steadily decreased as more manufacturing is outsourced. With two exceptions--specialty metals and avionics systems--materials and equipment prices have risen roughly at the same rate as inflation.

Rand concluded that the biggest contributors to cost...