Pentagon Mulls F-35 Sustainment Proposal

The Pentagon is assessing Lockheed Martin's proposal to reduce Joint Strike Fighter sustainment pricing by 16% over five years through a performance based logistics (PBL) contract, but the largest F-35 customer, the U.S. Air Force, says there are several things that must be worked out before signing the dotted line.

The company delivered a white paper to Ellen Lord, under secretary of defense for acquisition and sustainment, in August outlining how a five-year PBL contract could save the military money on F-35 sustainment, Ken Merchant, F-35 sustainment vice president for Lockheed Martin, told reporters last week at the Air Force Association's annual conference in National Harbor, Maryland. Current F-35 sustainment contracts are annual and do not allow the Joint Strike Fighter's supplier base to conduct forward planning, he said.

“What a PBL would do for us is give a five-year contract with [the] government and it would allow our suppliers to make those investments knowing that they have five years worth of business guaranteed,” Merchant said.

The F-35 program has delivered over 425 aircraft to the fleet and will continue to grow; in fact it will double over the next few years. This is something the Pentagon must consider before entering a PBL with Lockheed Martin, Will Roper, assistant secretary of the Air Force for acquisition, technology, and logistics, told Aerospace DAILY in an exclusive Sept. 18 interview.

“Normally a performance-based logistics contract makes sense when you have a majority of the fleet fielded, then you can start doing stable buys,” Roper said. “Those are the details that we'll need to look at. It's not just, would the performance-based logistics contract make sense if the fleet size were frozen? Does it make sense as the fleet size grows?”

The Pentagon also must consider supply chain issues and software for the Autonomic Logistics Information System (ALIS) as the fleet size grows, he said.

“Those problems might grow linearly as the fleet size grows [or] we might get a non-linear effect where they compound,” Roper said. “Those are the things we'll need to think through.”

In a perfect world, Lockheed Martin would like to negotiate a multiyear sustainment contract for the F-35, but executives admit the construct would be hard to sell on Capitol Hill.

“Multiyear contracts that are performance based can be very successful because they invite industry to make the upfront investment so that they can recoup their investment in terms of profit at a predictable period without worrying about the variability and the vacillations of the budgeting cycle,” Roper said. “The theory is sound, it's just the practice that has to be reviewed.”

Roper worries about F-35 software the most because it is not only needed to sustain the system but also is integral for modernization.

“Agile software development is so critical on our programs and I think it's not going to be a ‘nice to have' for the F-35, it's going to be an absolute ‘must have,'” he said.

Under Roper's direction the Air Force launched Mad Hatter, a software coding project tackling ALIS that has delivered initial applications to the flightline at Nellis AFB in Nevada.

“I'm really pleased that new [F-35 Joint Program Office] leadership under [Lt. Gen.] Eric Fick have viewed that as a very favorable direction for all of F-35 software that goes forward,” Roper said. “We're making the results available to them—not just the results in the field, but the process that produced them.”

Lockheed Martin has pledged to migrate ALIS to the cloud by 2020 and Roper agrees this is paramount for the future of the program because the enterprise must use cloud-based development tools. This is the way the commercial industry is heading and it provides security benefits, he added.

“I've directed numerous programs in the Air Force to move to our cloud-based DevSecOps stack, which is called Cloud One. F-16, F-22, B-21, [Ground Based Strategic Deterrent]—these are programs that need to write a lot of cloud quickly and securely,” Roper said. “Cloud-based development, if done correctly ... you can write secure code really quickly and get it accredited quickly, which we also want.”

https://aviationweek.com/defense/pentagon-mulls-f-35-sustainment-proposal