The US F-35 Joint Program Office (JPO) has awarded F-35 sustainment contracts and options with a total value of up to US$6.6bn (A$9.1bn) to Lockheed Martin for the 2021-2023 fiscal period.
The contracts cover the sustainment of the F-35 for US and international customers during 2021/22, and has options for the following two financial years.
“Working together with our industry partner, the F-35 joint program office team negotiated aggressive cost savings and performance targets that will benefit the global F-35 sustainment enterprise, and all F-35 customers,” JPO program executive officer, LtGen Eric Fick said in a Defense Department release. “This ‘21-’23 sustainment contract agreement is a positive step in securing affordable lifecycle costs for our customers.”
The sustainment contract includes base and deeper maintenance, aircrew and engineering training, fleet-wide data analytics, and supply chain management of spares and equipment for the US and international F-35 operators.
“Together with the (JPO), we recognise the critical role the F-35 plays in supporting our customers’ global missions and the need to deliver this capability affordably,” Lockheed Martin vice president and general manager of the F-35 program, Bridget Lauderdale said in a company release. “These contracts represent more than a 30 per cent reduction in cost per flying hour from the 2020 annualised contract, and exemplify the trusted partnership and commitment we share to reduce sustainment costs and increase availability for this…system.”
The Pentagon says that, as part of these contracts, it expects the average operating cost per flight hour for all three F-35 variants to be reduced from US$36,100 (A$49,730) in 2020, to US$33,400 (A$46,000) in 2023.
It should be noted that these numbers are not representative of Australia’s F-35A operating costs which are believed to be quite a lot less, as they amortise the more expensive and smaller in number F-35B and F-35C fleets.
The contract award comes in the face of growing concern in the Pentagon and US Congress over the ability to fully fund the US military’s full program of record requirements in the face of these high operating costs, with the USAF Chief of Staff, Gen CQ Brown saying he supports proposed legislation capping F-35A production if operating cost goals can’t be met.
The House Armed Services Committee’s (HASC) FY2022 defense policy bill proposes requiring the USAF, USN, and USMC to meet “cost per tail per year” targets for their F-35A, F-35B and F-35C fleets.
“The language from Congress is really in line with what we’re trying to get done,” Gen Brown told a conference on September 8. “One of our goals is to actually make this [program] affordable, and to make the sustainment costs affordable.”
Gen Brown’s comments follow a statement by HASC Chairman Rep Adam Smith who told the Brookings Institution of August 31, “If you bring the sustainment cost down, we’ll buy more. If you don’t, we’re not going to, simply because of the cost that is involved in that.”
Lockheed Martin says the latest contracts “lays the groundwork” for a possible future performance-based logistics (PBL) contract. The company has previously proposed a PBL contract which it says would save billions, but this has previously been rejected by the Pentagon over concerns of being locked into a long-term deal.