Pentagon Ready to Ramp Up F-35 Production, Studies Options for Logistics Support
The Pentagon has stopped being apologetic about the F-35 joint strike fighter and is now poised to rev up production to more than 100 airplanes per year.
After overcoming serious setbacks over the past decade, the outlook is much brighter for JSF, officials said May 29 at the conclusion of the annual F-35 CEO conference in Oslo, Norway.
“We are talking much more about the future,” Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall said during a conference call with reporters. “We are not sitting here worrying about the risk of completing development. We are focusing toward fielding the program and getting whatever efficiencies we can.”
Meeting those goals will not be easy, though. The next hurdle for the Pentagon is to secure congressional support for long-term production contracts, schedule complex aircraft upgrades and decide on a business arrangement for the logistics support of F-35 fleets worldwide.
F-35 partner countries include Australia, Italy, the Netherlands, Norway, Turkey and the United Kingdom. Canada and Denmark are partners but have not yet committed to buying airplanes. Israel, Japan and the Republic of Korea are purchasing jets through the foreign military sales program. Norway will unveil its first F-35A in September. It will be the fourth partner nation to receive a jet along with the U.K., Netherlands and Australia.
“We spent a lot more time this year on where we are going next,” Kendall said of the CEO conference. The partners are eager to see concrete plans for how the F-35 will be kept technologically up to date and how nation-specific weapons will be engineered into their airplanes.
“Detailed planning will take place over the next few months,” Kendall said. Also of interest to all F-35 buyers is the possibility of bundling more airplanes into a long-term production contract starting in fiscal year 2018. “We are looking at the possibility of a block buy,” he said. That could be a three-year deal from 2018 to 2020 for as many as 150 airplanes per year, a mix of U.S. and non-U.S. variants. Kendall will have to convince many skeptical lawmakers who generally frown on long-term weapons deals. “We still have some work to do there,” he said. “We feel optimistic.”
So far, 123 F-35s have been produced. The fleet will grow to 199 by 2016 and 356 by 2018.
F-35 prime contractors Lockheed Martin and Pratt & Whitney have long pleaded for multi-year production commitments in order to be able to negotiate better prices with suppliers. “It allows industry to plan with some confidence,” Kendall said. By including foreign buyers in the block buy, the Pentagon also would feel more secure that the partner nations will stick with the program. “We want to set up an arrangement where there is a financial incentive for staying in the program as planned.” The biggest benefit would be lower prices, he added. “I would like to see double digit savings.”
Over the next two years, the Pentagon will have to come up with a plan for fleet-wide F-35 logistics support. The Defense Department last year assigned F-35 regional maintenance, repair, overhaul and upgrade facilities for airframes and engines for the European and Asia-Pacific regions. But it now faces the daunting task of proposing a business strategy for competing the work. Lockheed and Pratt will remain the prime suppliers of logistics services for now, but Kendall believes the work should be competed in the future.
Developing a logistics support plan that everyone will support will be extremely difficult because of the diversity of customers. There are three F-35 variants — conventional, aircraft carrier-based and short-takeoff vertical landing — and each country uses different weapons and sensors. Further, each variant will be entering service at different times. The U.S. Marine Corps will declare the F-35B operational this summer, the Air Force in August 2016, the Navy in 2019, and the international partners some time after that.
“The complexity and scope is enormous,” Kendall said. “We are starting to come to grips with how to organize for that.” The big question is how the program will handle aircraft sustainment on a global scale, said Kendall. “We haven’t made a decision on that yet. We are having conversations. I’ve asked our team to investigate options in the next few months. It’s an incredibly complicated thing to sort out. Each nation has its own preferences for how to do business. People’s needs are evolving over time. We have to work our way through all that.”
The goal is to transition to “something that we think will be more efficient,” said Kendall. “We need a few months to figure out exactly what that is.” What is clear is that “we want to have as much competition as possible.”
One option would be to use “performance based logistics” contracts where suppliers are required to meet specific targets for aircraft availability, for instance, and are paid for achieving those goals, rather than per individual tasks. “Our historical analysis of performance logistics show a 10 to 15 percent reduction in cost over transactional logistics support,” said Kendall. The performance-based logistics model would open up the market to companies other than the original manufacturers.
Air Force Maj. Gen. Jeffrey Harrigian, director of the F-35 integration office, said the sustainment of the fleet is one of the program’s biggest challenges. “Lots of thought and effort are being put into this,” he said.
On the F-35 program agenda, too, are the next series of software and hardware upgrades for all three variants. The most advanced versions of the F-35 that will be delivered between now and 2019 will have either block 2B or block 3F software. Program engineers are still working to fix glitches in both these software configurations as well as problems in the logistics support software. They also have to make sure the training simulators have the same configuration as the actual aircraft.
The next upgrade, block 4, will focus on integrating new weapons. “We’re going to sort that out during the next few months,” Kendall said. The United States, the United Kingdom, Norway and Turkey all have different weapons they want to bring into the F-35. Block 4 upgrades are scheduled to take place between 2019 and 2025.
Harrigian said he would like to see a firm plan for block 4 sooner, rather than later. “It’s important that we have a strategy to look beyond 3F,” he said last week at an Air Force Association gathering.
“We need to determine what we need to do to move forward.” A panel of four-star officers, the Joint Requirements Oversight Council, will be reviewing a proposed block 4 plan, he said. “We have to decide what we can afford. That’s the challenge for us. Sometimes our appetite is more than we can afford.”
The Air Force, as the largest buyer of F-35 airplanes, has a lot at stake. Harrigian said service leaders are driving home the message that “we have to move from the acquisition side to the operational side of the program” so there is a better understanding of how this aircraft could help the U.S. armed forces and allies win wars.
Considering the F-35’s spotty track record and $400 billion price tag, industry insiders said, it is understandable that the Pentagon continues to struggle with how to turn around the conventional wisdom that its most expensive weapons program is a boondoggle.
“There is a lack of understanding of what it brings to the fight,” said retired Air Force Gen. Chuck Wald, now a consultant at Deloitte. Many military and civilian leaders for years have been reluctant to
“fall in love” with the airplane, he said, because of the intense naysaying surrounding the program. “I think it’s time for us to embrace the F-35, look at how to decrease the sustainment cost, make sure we have the partners on board, and make sure we’re working with partners to maximize shared risk.”
Critics will continue to deride the F-35 as an exotic weapon system that the nation can’t afford and doesn’t need, he said, but the Pentagon has to plow ahead. One of the United States’ most successful fighter jet programs, the F-16, just delivered the 4,500th airplane. When it was first conceived, the plan was to build only 700 to 800, Wald said. “I’m not saying the F-35 is going to make it to 4,500 but I bet we get close to 2,400.”