June 14, 2019 | International, Aerospace
By: Valerie Insinna
WASHINGTON — The Pentagon's latest deal with Lockheed Martin for new F-35 jets includes some for Turkey, raising the question of what will happen if the country is pushed out of the program.
The handshake agreement announced Monday totals about $34 billion for 478 new F-35s over lots 12 through 14, including about five to 10 jets for Turkey per lot, one source told Defense News.
But that might not complicate the process of finalizing the contract agreement, aerospace analysts and other sources close to the program said — even as the Defense Department begins “unwinding” Turkey's participation in the program.
At issue is Turkey's purchase of the S-400, a Russian air defense system that U.S. and NATO officials say is at odds with the alliance's plan to field the F-35. Despite months of discussions between Ankara and Washington, Turkish leaders have emphatically maintained that it will not cancel the S-400 order.
In response, acting U.S. Defense Secretary Patrick Shanahan on June 6 approved a plan to strip Turkey from the F-35 program. Turkish pilots and maintainers undergoing training at U.S. bases are required to leave the United States by July 31, and contracts with Turkish defense companies could end in 2020.
Ankara has since doubled down on its intent to buy the S-400. Turkish President Recep Tayyip Erdogan said Wednesday that the purchase is already “a done deal” and that the Russian air defense system will be delivered in July, according to Reuters.
“We will call to account in every platform Turkey being excluded from the F-35 program for reasons without rationale or legitimacy,” Erdogan said.
So what if Turkey leaves?
Sources told Defense News that Turkey's potential exit from the program isn't expected to have much of an impact on the deal for lots 12 through 14.
The Pentagon hasn't provided exact costs per unit for the new F-35s, but it has acknowledged that unit flyaway costs will decrease by about 8.8 percent in Lot 12, made up of 157 jets. The department also estimates unit prices will drop by about 15 percent from Lot 11 to Lot 14 across all variants.
By that framework, F-35 customers will be able to buy an F-35A conventional-takeoff-and-landing model for less than $80 million by Lot 13 — one year earlier than expected. That isn't expected to change, even if Turkey is knocked from the program, a department source said.
Rebecca Grant of IRIS Independent Research said it's likely the number of jets and the negotiated prices in the handshake agreement will stand, adding that the Defense Department still has options on the table.
“They can let Turkey go ahead and have those jets [and] park them in the desert [until this issue is resolved]. They can switch to a customer that wants earlier deliveries — also an option,” she said.
Dealing with these types of problems isn't new for the United States, added Grant, who pointed to the U.S. arms embargo on Pakistan in 1990, which resulted in the country's F-16s being placed into storage.
Richard Aboulafia, an aerospace analyst at the Teal Group, said there are multiple ways for the Pentagon to deal with the fallout of a Turkish exit from the program.
Countries like Singapore and Poland, which have expressed interest in buying F-35s, could join the program and pick up the slack. If Congress adds F-35s to upcoming budget cycles — which has been typical in recent years — the U.S. armed services could buy Turkey's jets.
“I really don't see it as a challenge,” Aboulafia said. “This is not the same as building white tails in the commercial aviation business.”
Another option was outlined by Marillyn Hewson, the head of F-35 manufacturer Lockheed Martin, in May: Sell Turkey's jets to existing international customers.
“It's not a significant number of aircraft that if there was a sanction that they couldn't receive those aircraft now or in the future; it will be backfilled,” she said at Bernstein's Strategic Decisions Conference, according to Defense One. “In fact, a lot of countries say: ‘We'll take their [production line] slots.' They [other countries] really want the aircraft. I don't envision that being an impact on us from a Turkey standpoint.”
U.S. officials remain hopeful that Turkey will cancel its S-400 order, and they have made it clear that Turkey's participation in the F-35 program will continue if that happens.
“Turkey still has the option to change course. If Turkey does not accept delivery of the S-400, we will enable Turkey to return to normal F-35 program activities,” Ellen Lord, the Pentagon's acquisition chief, said June 7.
The U.S. government is no rush to expel Turkey from the program, Grant said. Including Turkey in the current contract negotiations helps send that message.
“We need Turkey in NATO, and we'd like to see a Turkish Air Force with F-35s,” she said. “This is going to take some diplomacy.”
Aboulafia noted that Turkey benefits from its involvement in the F-35 program, with its companies manufacturing parts for the jet's F135 engine and a second supplier providing the center fuselage. The country has made the development of its defense industry a priority, and risks becoming a cottage industry if it alienates its NATO allies, he said.
“This does not do it any favors. They are going to have to line up partners and programs very fast," he added.
But the prospect of a happy resolution is looking increasing grim, he said.
“There is no room for compromise [on the U.S. side], and on the other side you have a populist, who is making this a test of his leadership. There is a lot of ego here.”
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October 27, 2020 | International, Aerospace, Naval, Land, C4ISR, Security, Other Defence
AIR FORCE AMI Industries Inc., Colorado Springs, Colorado, has been awarded a $700,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the delta qualification, production and fielding of a next generation ejection seat for various Air Force Mission Defense systems. Work will be performed in Colorado Springs, Colorado, and is expected to be completed Oct. 22, 2030. This award is the result of a sole-source acquisition. Fiscal 2020 research, development, test and evaluation funds in the amount of $5,200,000 are being obligated at the time of award. Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8606-21-D-0001) L-3 Technologies, Greenville, Texas, has been awarded a $9,090,496 firm-fixed-price modification (P00008) to contract FA8620-18-F-4816 for management support services. The contract modification provides for the exercise of a pre-priced option for additional management support services. Work will be performed in Greenville, Texas, and is expected to be completed Dec. 31, 2021. This contract involves 100% Foreign Military Sales (FMS), and is the result of a sole-source acquisition. The total face value of the contract is $40,316,767. FMS funds in the full amount are being obligated at the time of the award. The 645th Aeronautical Systems Group, Wright-Patterson Air Force Base, Ohio, is the contracting activity. DEFENSE LOGISTICS AGENCY American Posts LLC,* Toledo, Ohio, has been awarded a maximum $30,000,000 firm-fixed price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for fence posts in various sizes. This was a competitive acquisition with one response received. This is a two-year base contract with three one-year option periods. Location of performance is Ohio, with an Oct. 23, 2022, ordering period end date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2021 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E6-21-D-0025). Bell Boeing Joint Project Office, California, Maryland, has been awarded an estimated $27,897,619 firm-fixed-price requirements contract for removal, repair and replacement of V-22 spindle bearings. This was a sole-source acquisition using justification 10 U.S. Code 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a four-year contract with no option periods. Locations of performance are Maryland and Texas, with an Oct. 23, 2024, performance completion date. Using military services are Marine Corps, Navy and Air Force. Type of appropriation is fiscal 2021 through 2025 Navy and Special Operations Command operations and maintenance funding. The contracting activity is the Defense Logistics Agency, Aviation, Philadelphia, Pennsylvania (SPRPA1-17-D-009U). UPDATE: Federal Contracts Corp., Tampa, Florida (SPE8EC-21-D-0070), has been added as an awardee to the multiple award contract for agricultural equipment, issued against solicitation SPE8EC-17-R-0007, and was awarded June 12, 2020. WASHINGTON HEADQUARTERS SERVICES Guidehouse LLP, McLean, Virginia, has been awarded a $15,697,724 firm-fixed-price, labor-hours, and time and material contract. The operation support services contract provides audit and data analytics support to the deputy chief financial officer of the Office of the Under Secretary of Defense (Comptroller). Fiscal 2021 operations and maintenance funds in the amount of $15,697,724 are being obligated at the time of award. The expected completion date is Oct. 25, 2025. Washington Headquarters Services, Arlington, Virginia, is the contracting activity (HQ0034-19-A-0017). ARMY Mississippi State University, Mississippi State, Mississippi, was awarded an $11,131,723 modification (P00030) to contract W56HZV-17-C-0095 for simulation-based reliability and safety virtual prototyping of autonomy-enabled ground systems. Work will be performed in Mississippi State, Mississippi, with an estimated completion date of Oct. 22, 2022. Fiscal 2020 research, development, test and evaluation (Army) funds in the amount of $11,131,723 were obligated at the time of the award. The U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2393050/source/GovDelivery/