$1.4 Billion F-35 Sustainment Contract Raises Questions
(Source: Defense-Aerospace.com; posted May 2, 2018)

By Giovanni de Briganti
PARIS --- The Pentagon on April 30 awarded Lockheed Martin a contract worth $1.421 billion “for recurring logistics services for F-35 air systems” already delivered to the “US military services, foreign program partners and Foreign Military Sales customers.”

The announcement breaks down the contract’s value among the above categories of user, and between the current financial year and next, and describes the contracted services as follows:

“Services to be provided include:
-- ground maintenance activities;
-- action request resolution;
-- depot activation activities;
-- Automatic Logistics Information System operations and maintenance;
-- reliability, maintainability and health management implementation and support;
-- supply chain management; and
-- activities to provide and support pilot and maintainer initial training.”



Analysis of the announcement leads to some interesting observations.

The first, and obvious, finding is that all of this work, described as including ground maintenance activities, action request resolution, ALIS operations and maintenance and more, takes place exclusively in plants operated by Lockheed (Fort Worth, Orlando, Greenville and Redondo Beach) and BAE Systems (Warton).

None takes place on F-35 bases in the United States or abroad, where one would expect ground maintenance activities, for example, to be needed, even though these funds are described in the announcement as including “Fiscal 2018 operations and maintenance” funds.

A second observation is that this contract does not concern the engine, nor the subsystems and components provided by other contractors, which logically severely limits the effectiveness of any maintenance that only covers the “air vehicle.”

Maintenance costs drop by half in winter

Thirdly, the way the contract is apportioned between the current financial year and the next raises more questions. The Pentagon’s announcement says that $845,359,517 of the contract’s value “will expire at the end of the current fiscal year.”

This means that these $845 million must be spent by Sept. 30, i.e. in the next five months, which implies an average expenditure rate of $169 million per month.

For the remaining seven months of the contract, (October 2018 to April 2019), Lockheed will receive the balance, or $558 million – or an average of $80 million per month.

Why do “recurring logistic services” cost twice as much from April to September 2018 than they do from October to April 2019? Do Lockheed and the Pentagon anticipate that F-35 operations will be reduced by half in winter?

We solicited explanations by e-mail on April 30 from Lockheed Martin’s chief spokeswoman for the F-35 program, Carolyn Nelson, and Joint Program Office spokesman Joe DellaVedova. Neither acknowledged our message nor provided answers.

Maintenance costs by version

As of March 25, all operators had accepted delivery of 280 F-35 aircraft, Lockheed said in its press release on this contract. It did not say that 14 more have flown and are ready for delivery, but have been refused by the Pentagon because of a spat with main contractor Lockheed Martin over who pays the cost of fixing manufacturing mistakes.

The 280 aircraft delivered to date include 180 F-35A variants, 72 F-35B variants and 28 F-35C variants, the US Navy being the sole operator of this latter variant for now.

As the Pentagon’s announcement helpfully breaks down the contract’s cost by operator, one can broadly derive average support costs by variant, as shown in this table:

Click on the image to enlarge

It is strange that the F-35B STOVL version operated by the US Marine Corps, which is the most expensive of the three to buy, should be the cheapest to support of all three variants, and even stranger that it should cost $2.5 million less to support than the F-35C carrier version.

Absent official explanations from Lockheed and the JPO, there is no plausible explanation for what appear to be inconsistencies in this huge contract, which will generate average sales of $118.4 million per month for Lockheed, and cost each F-35 operator an average of $5.05 million per aircraft, in addition to other direct operating costs and routine maintenance carried out by their own personnel.

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