The F-35 Joint Program Office plans to issue one performance-based logistics (PBL) contract to reduce operating costs on the stealth aircraft.
The programme office has launched a market research effort ahead of a plan to grant a three-year PBL contract for 2024 to 2026, it says in a request for information posted online on 12 June.
The potential contract mirrors a white paper PBL proposal put forward by Lockheed Martin in September 2019 to cut the operating cost of the F-35 to $25,000 per hour by fiscal year 2025. In FY2018, it cost $44,000 an hour to fly the F-35A, the conventional-take-off-and-landing variant of the Joint Strike Fighter trio. The F-35C carrier variant and F-35B short-take-off-and-vertical-landing variants cost even more to fly.
By issuing a PBL contract, the Joint Program Office could award a flat fee to maintain certain levels of performance on the F-35, such as cost per flight hour and mission capability rates. That differs from traditional maintenance contracts where the operator would pay for supply of parts or repair services.
In theory, a multiyear PBL contract could allow Lockheed Martin to take ownership of the whole maintenance and sustainment process of the F-35. The company could then use the multiple year commitment to take advantage of economies of scale savings by buying bulk parts and services upfront at lower prices from suppliers. It could also create cheaper sustainment processes. Some savings would be passed on to operators of the F-35, while Lockheed Martin would keep the rest as a profit.
However, the Pentagon has been skeptical that the F-35’s operating costs can be reduced to $25,000 per flying hour as promised by Lockheed Martin.
“Right now we are targeting a $34,000 per cost per flying hour for the F-35A in 2024,” said former F-35 programme executive officer, US Navy Vice Admiral Mat Winter in a May 2019 hearing before the US House of Representatives Armed Services Committee.
Robert Daigle, director of cost analysis and programme evaluation for the US Department of Defense, added to that scepticism in the hearing.
“The department doesn’t see a path to get to $25,000 per flying hour by FY2025,” he said. “After 2024 our projections are that the cost per flying hour are going to flatten out and increase a little bit because the planes are starting to age and we’re going to have to bring them back into the [maintenance] depot.”
The Joint Program Office’s PBL contract would exclude the stealth fighter’s Pratt & Whitney F135 engine, as well as components of the Autonomic Logistics Information System, also known as ALIS, a troubled software program that manages prognostics, maintenance, supply chain, flight operations and training for the jet.
“The PBL will require F-35 supply chain management and demand reduction for components of the F-35 aircraft, including training systems and tools, support equipment and laboratories,” says the Joint Program Office in its request for information. “Logistics functions to be included include, but are not limited to: repair, replenishment, overhaul, and modification of components; inventory management; configuration management and obsolescence management authority and accountability; and reliability improvements. The Contractor will be required to perform all these functions for depot-level repairables while meeting supply response time metrics for destinations [Contiguous United States] and [Outside Contiguous United States].”
The Joint Program Office wants Lockheed Martin to partner with maintenance depots of F-35 operators and perhaps subcontract with government-directed sources as part of the potential PBL agreement.
Lockheed Martin and the Joint Program Office did not immediately respond to a request for comment.
