Lockheed Martin Looking at Recompeting More F-35 Components

F-35 joint strike fighter

Photo: Air Force

FARNBOROUGH, UNITED KINGDOM — Lockheed Martin may seek to recompete contracts for components of the F-35 joint strike fighter as it moves to drive down costs and improve capability, a company executive said July 16.

Lockheed has taken heat, including from President Donald Trump, about the price tag for the aircraft. The Defense Department has been projected to spend $400 billion to acquire more than 2,400 fighters, and more than $1 trillion on the program when accounting for full lifecycle costs including operations and sustainment.

The company announced in June that Raytheon had been chosen to supply the distributed aperture system, or DAS, sensor suite in a follow-on competition after the original manufacturer Northrop Grumman declined to participate. Northrop executives have said the company decided it was no longer a favorable business opportunity.

During a press briefing at the Farnborough International Airshow outside of London, Greg Ulmer, Lockheed’s vice president and general manager for the F-35 program, was asked if the company would seek to shake up its supply chain for other components of the fifth-generation fighter.

“It’s good business for us to continually look at our supply and should we resource or compete that material,” Ulmer said.

“We want best value, so as we produce the aircraft we want to make sure we’re producing the material that meets the requirement for the least amount of cost. And so we’re going to continuously look at that, refine that and approach that [and] have the discussions not just within Lockheed Martin but with the supply” chain.

Ulmer said he expects other suppliers to take the same approach.

“They’re going to look at, within their supply base, within their subtiers, does it make sense to go resource this [from other companies] from a capability, operational perspective, and obviously affordability and cost,” he said.

Lockheed will work closely with the F-35 joint program office when it comes to those kinds of recompete decisions, he noted.

As the program moves into periods of block buys and multiyear contracts, the company will continue to look at ways to drive down the costs of materials. It is also buying more materials through long term agreements in anticipation of future demand, Ulmer noted.

“What we’re looking to do is incentivize off-the-shelf satisfaction, so that when the customer goes to grab [a line replaceable unit] it is in fact there,” he said.

Lockheed recently reached a “handshake agreement” with the Defense Department for low-rate initial product lot 11, he said, and the parties are working to “definitize” the contract.

The aim is to drive the down the price of the aircraft to $80 million per plane by LRIP lot 14 in the early 2020s as production rates increase and efficiencies are achieved, he said.

Industry is responsible for 47 percent of the operation and sustainment costs of the aircraft, he noted. Over the next 10 years Lockheed aims to reduce that by 38 percent. The program is on track to lower O&S expenditures to approximately the same amount it costs to operate a fourth-generation fighter, he added.

The company is also looking to do more rapid technology insertion to enhance the capability of the F-35, he said. All of the new aircraft being produced now are the more advanced block 3F systems, he noted.

“From the [software engineering directorate’s] perspective, we kind of did this big bang approach for this big huge final capability release” for block 3F, he said “In the future what you’re going to see is … rapid insertion spiral development.”

There will be “a lot of updates” between now and LRIP 14, he added. Another major technology refresh will occur in lot 15, he noted.

“In block 4 you will see different releases of capability to the airplane over that horizon,” he said. “We won’t wait for the end for all that [new capability] to be inserted. We will do it in increments as those capabilities come onboard.”

Meanwhile, Lockheed Martin is looking for potential new overseas customers including Belgium, Germany, Finland and Switzerland, he said. The company has responded to a request for information from Switzerland and is prepared to respond to a solicitation from Germany, he added.

Ulmer was asked if Lockheed was in talks with Middle Eastern governments about potentially buying the aircraft, and whether the Trump administration has indicated it is prepared to lift restrictions on the sale of the fighter to countries in the region besides Israel, which is already purchasing the plane.

“Those discussions are really government to government and they’re not for me to discuss in particular,” he said. Ulmer declined to identify other countries that the company is in talks with that haven’t been publicly named.

“The kind of general line of thought is if you’re somebody that may be an existing F-16 customer, then there might be a similar [buying] pattern there,” Carolyn Nelson Baker, director of fighter group communications at Lockheed, told National Defense.

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