F-35 Spare Parts Funding at Risk as Pentagon Seeks Data Rights (excerpt)
(Source: Bloomberg News; published May 20, 2019)
By Anthony Capaccio and Roxana Tiron
By ignoring a Pentagon request for cost data on F-35 spare parts, Lockheed has opened what promises to be a long fight against the US government over the F-35’s IP rights, which were paid by the government but belong to the company. (ITAF photo)
The House panel that approves defense spending intends to withhold half of next year’s funding for F-35 spare parts until the Pentagon and Lockheed Martin Corp. agree on the sale of technical data for spare parts to improve the tracking of items and allow purchases from other suppliers.

Struggling to resolve spare parts shortages and bottlenecks for the fighter plane worldwide, the Defense Department this month requested that Lockheed offer a proposal to sell it cost and technical data rights to the parts. That would give the Pentagon the ability to seek its own suppliers for parts or even produce some at its maintenance depots.

But the panel said the department has yet to hear back from Lockheed, the No. 1 U.S. defense contractor.

With the issue unresolved, the House Appropriations Defense subcommittee said it will only allow spending of $364 million of $728 million requested for Navy and Marine Corps jet parts in fiscal year 2020 until the Pentagon has “received an adequate cost proposal” from Lockheed. (end of excerpt)

Click here for the full story, on the Bloomberg News website.

(EDITOR’S NOTE: This is just the opening skirmish in what promises to become a full-scale war between the Pentagon and its largest supplier, Lockheed Martin, over the Intellectual Property rights to the F-35 fighter and its Autonomic Logistic Information System (ALIS) support software.
One of the major anomalies of the Joint Strike Fighter program is that the original contract allowed Lockheed to keep ownership of the IP, even though the program was – and remains - fully financed by the US government and its foreign partner nations.
Ownership of the IP rights allows Lockheed, alone, to decide how much to charge for its services. In addition, it alone also controls the ALIS software and its servers, without which F-35s throughout the world cannot operate.
Customer nations will have only two alternatives: pay whatever Lockheed charges, or not pay, and see their F-35 fleet become inoperative.
And there is no legal recourse, since the IP rights conferred by the contract are also enshrined, at least implicitly, in the various international agreements signed by participating governments.
Lockheed, as detailed in the above article, is not shy about asserting its contractual rights.
It is ignoring a Pentagon request to provide information, and the government can only cut spare parts funding in the hope of forcing Lockheed to reply.
The inanity of the situation is that, as recently reported by the GAO, a lack of spare parts has seriously degraded F-35 availability, and cutting spare parts funding in half can only aggravate an already unacceptable situation.
Unless the government recovers the program’s IP rights, the fight with Lockheed can only worsen.)


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