2004 USAF DIRECT COSTS OF CORROSION

1. 2004 USAFDIRECT COSTS OF CORROSION Mr. Richard Kinzie USAF Corrosion Prevention and Control Office

2. Cost of Corrosion Report and Analysis Four studies have been done (1990, 1997, 2001, 2004) Goal of determining the Total Annual Direct Corrosion Maintenance Costs With each report there has been a growing emphasis on reporting the various cost elements beyond the total cost Collection skills and field cooperation has increased with each study The USAF has determined the Direct Cost of Corrosion Maintenance for 4 separate years between 1990 and 2004. The results presented here for the 2004 base year are preliminary and include several estimates. Corrections to these estimates will be included in the final conference presentation as the final data becomes available. As data collection techniques, skills, and user support have improved, the data acquisition has become more complete. In the final reports we have made attempts to quantify data not captured in the early studies for comparisons sake. The USAF has determined the Direct Cost of Corrosion Maintenance for 4 separate years between 1990 and 2004. The results presented here for the 2004 base year are preliminary and include several estimates. Corrections to these estimates will be included in the final conference presentation as the final data becomes available. As data collection techniques, skills, and user support have improved, the data acquisition has become more complete. In the final reports we have made attempts to quantify data not captured in the early studies for comparisons sake.

3. Direct Corrosion Maintenance: Included Cleaning to remove surface contaminants or to facilitate inspection for corrosion. Stripping of protective coatings (regardless of purpose). Inspection to detect corrosion or corrosion related damage Treatment of corrosion damage (corrosion removal, sheet metal or machinist work, replacement, etc.). Application of surface treatment (Alodine, other surface etch). Application of protective coatings (regardless of reason). Time spent gaining access to and closure from parts requiring any of the above activities. Preparation and clean-up activities associated with any of the above. Every attempt has been made to define both inclusions and exclusions such that the costs will be clear and useable to manage the USAF Corrosion Program and the elements of this program. Intangible or indirect costs such as those for deferred maintenance, premature obsolescence, training, etc. are not included. Every attempt has been made to define both inclusions and exclusions such that the costs will be clear and useable to manage the USAF Corrosion Program and the elements of this program. Intangible or indirect costs such as those for deferred maintenance, premature obsolescence, training, etc. are not included.

4. The cost of training personnel in corrosion control maintenance. The cost of constructing and maintaining facilities for performing corrosion maintenance. The cost of aircraft downtime associated with corrosion maintenance. The added initial cost of obtaining aircraft with corrosion resistant systems installed. The cost of maintaining a technical and engineering work force well trained in corrosion prevention and control techniques and processes. The cost of R&D efforts related to corrosion prevention and control. A significant number of management positions throughout the Acquisition Centers and the Air Logistics Centers are provided in support of corrosion control maintenance; these indirect personnel are not included. RP and RPIE Classified Systems Direct Corrosion Maintenance: Excluded The costs of aircraft downtime resulting from corrosion are real but very difficult to define, particularly with fighter type aircraft whose mission is not associated with revenue generation. Research and Development is essential to the corrosion program and required technology but, again, these are investments managed separately from the corrosion maintenance program. Likewise, the costs of Real Property (facilities) and Real Property Installed Equipment (RPIE) are not included since they are depreciable and have corrosion costs of their own which are handled under a separate program managed by the Air Force Civil Engineering Support Agency. The costs of corrosion added by classified systems has not been included in these figures in order that the study be openly available. The costs of aircraft downtime resulting from corrosion are real but very difficult to define, particularly with fighter type aircraft whose mission is not associated with revenue generation. Research and Development is essential to the corrosion program and required technology but, again, these are investments managed separately from the corrosion maintenance program. Likewise, the costs of Real Property (facilities) and Real Property Installed Equipment (RPIE) are not included since they are depreciable and have corrosion costs of their own which are handled under a separate program managed by the Air Force Civil Engineering Support Agency. The costs of corrosion added by classified systems has not been included in these figures in order that the study be openly available.

5. Total Corrosion Costs Comparison, FY 04$’s Presentations of the previous studies have addressed the cost trends with explanations as to reasons for many of those changes. For instance the AF fleet decreased by nearly 35% between 1990 and 1997 though the costs of corrosion in adjusted dollars still showed some gain for the remaining fleet. This was particularly important since many of the retirements were older aircraft. It has also been pointed out that there tends to be a decrease in corrosion maintenance when budgets contract only to be a larger increase when those budgets are again restored. Such was the case between 1990 and 1997 as will be shown later in this presentation. Caution is urged in looking at this information to remember that these are strictly costs and do not necessarily translate into condition or maintenance man hours directly. The large increase between 2001 and 2004 results mostly from a disproportionate increase in both direct Air Force and Depot Labor Rates. The published direct Air Force labor rates increased by nearly 20% during the first half of 2004Presentations of the previous studies have addressed the cost trends with explanations as to reasons for many of those changes. For instance the AF fleet decreased by nearly 35% between 1990 and 1997 though the costs of corrosion in adjusted dollars still showed some gain for the remaining fleet. This was particularly important since many of the retirements were older aircraft. It has also been pointed out that there tends to be a decrease in corrosion maintenance when budgets contract only to be a larger increase when those budgets are again restored. Such was the case between 1990 and 1997 as will be shown later in this presentation. Caution is urged in looking at this information to remember that these are strictly costs and do not necessarily translate into condition or maintenance man hours directly. The large increase between 2001 and 2004 results mostly from a disproportionate increase in both direct Air Force and Depot Labor Rates. The published direct Air Force labor rates increased by nearly 20% during the first half of 2004

6. Total Corrosion Costs and USAF O&M Budget(s) There are many ways to look at the costs of corrosion and their significance. The >13% compounded corrosion cost growth between 2001 and 2004 reflects a very limited increase in corrosion maintenance hours and aircraft condition. Rather it reflects the large increases in labor rates and increased overhead costs, costs of waste disposal, etc. However, these increased costs, regardless of the reason, represent an increase in the percentage of the O&M costs and make any prevention and mitigation activities of increased benefit. It should be recognized that many of these cost increases are outside of the control of the operator or the maintainer. There are many ways to look at the costs of corrosion and their significance. The >13% compounded corrosion cost growth between 2001 and 2004 reflects a very limited increase in corrosion maintenance hours and aircraft condition. Rather it reflects the large increases in labor rates and increased overhead costs, costs of waste disposal, etc. However, these increased costs, regardless of the reason, represent an increase in the percentage of the O&M costs and make any prevention and mitigation activities of increased benefit. It should be recognized that many of these cost increases are outside of the control of the operator or the maintainer.

7. Chart of AF O&M Budget vs. Total Annual Corrosion Costs As mentioned earlier, the costs of corrosion maintenance in any year tends to decrease with decreases in the maintenance budget. When the maintenance budget again increases the corrosion maintenance tends to increase proportionally even more. This is reflected in the gradually increasing portion of the O & M budget consumed by corrosion maintenance. This emphasizes the fact that deferring corrosion maintenance is counterproductive except in carefully managed situations where repairs are made opportunistically in conjunction with other actions. The majority of corrosion repair costs come from gaining access to the corroded structure and restoring that structure and not from the repairs or replacement of the parts themselves. Thus, where scheduling is properly managed those repair costs can be reduced significantly. As mentioned earlier, the costs of corrosion maintenance in any year tends to decrease with decreases in the maintenance budget. When the maintenance budget again increases the corrosion maintenance tends to increase proportionally even more. This is reflected in the gradually increasing portion of the O & M budget consumed by corrosion maintenance. This emphasizes the fact that deferring corrosion maintenance is counterproductive except in carefully managed situations where repairs are made opportunistically in conjunction with other actions. The majority of corrosion repair costs come from gaining access to the corroded structure and restoring that structure and not from the repairs or replacement of the parts themselves. Thus, where scheduling is properly managed those repair costs can be reduced significantly.

8. Total Annual Costs The simple costs of corrosion in the years shown would indicate a trend that could be alarming. However, previous discussions would indicate that this trend is as much of an artifact of business practices as it is of the actual corrosion condition of the equipment. The simple costs of corrosion in the years shown would indicate a trend that could be alarming. However, previous discussions would indicate that this trend is as much of an artifact of business practices as it is of the actual corrosion condition of the equipment.