Lockheed eyes new F-35 parts deal

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Tue, May 2, 2023 at 9:11 PM
WASHINGTON — By the end of the year, a new and unusual deal for the F-35 fighter′s spare parts could be in place — one that would flip the current supply model on its head. If the proposed performance-based logistics contract works the way F-35 manufacturer Lockheed Martin has promised, it will save the government money, improve the availability of spare parts and give the company greater flexibility on how it assists repairs, such as making it easier to fix a broken part without fabricating a new one.

Lockheed has for years sought a performance-based logistics, or PBL, contract for the F-35, albeit in a different form. Instead of the traditional transactional model in place today, in which a contractor is paid for specific parts or services, a PBL deal pays the contractor based on how well it meets expected performance outcomes. The PBL contract now in negotiations, referred to as a “demand reduction” deal, would be a more limited version of the “tip to tail” agreement Lockheed first proposed in 2019, and would cover only the spare parts needed to repair the fighter.
Lockheed’s original tip to tail pitch would have also covered support and sustainment activities, and judged the company on overall mission-capable rates, but the Pentagon balked. The military’s F-35 Joint Program Office told Defense News it opted to scale back the deal’s scope to one “that incentivizes [Lockheed] to take risks in areas they have full control over.

”The JPO said it is on track to award the five-year deal to Lockheed by the end of this year, if a study using data from the Pentagon’s Cost Assessment and Program Evaluation office verifies to Congress that a PBL deal would either reduce cost or improve readiness. A companion deal, for repairs and other non material sustainment support and services not covered by the PBL contract, would also be awarded at the same time.
How would a PBL deal work?
The military has awarded Lockheed Martin multiple iterations of the current transactional contract to sustain F-35s since the fighter program’s inception, most recently in 2021. But for years the program has struggled to hold sustainment costs down and keep the plane’s readiness rates high enough. The average mission-capable rate for all U.S. F-35s is 56%, which falls below the 70% readiness rate the military wants for the Air Force’s F-35A, and the 75% goal set for the Department of the Navy’s F-35B and F-35C variants.

A supply chain-focused PBL contract would operate differently, Apollo added, as Lockheed wouldn’t need to keep specific numbers of parts on hand. Instead, the company would be judged on whether those parts are available when needed, or whether it can get those parts to the field within a certain amount of time.
https://news.yahoo.com/lockheed-eyes-f-35-parts-141121849.html?fr=sycsrp_catchall
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Go QHL ! ..... Houston ... we have checked all systems and are ready for lift off ..... roger that QHL !