Jura The idiot
General
interestingly,
Next F-35 Deal Expected Soon, But Multi-Year Strategy Shifts
May 10, 2019
Next F-35 Deal Expected Soon, But Multi-Year Strategy Shifts
May 10, 2019
The ’s acquisition leader said on May 10 that she expects to sign the next production contract for hundreds of by July, but pulled back from the program’s previous plan to switch to a multi-year order for U.S. aircraft starting in 2021.
A contract signing by July would break a string of protracted negotiations between and the Joint Program Office (JPO) over each annual production lot.
The JPO signed the 11th lot of low-rate initial production (LRIP-11) for 141 F-35s on Sept. 28—nearly a year behind schedule and only three days before the fiscal year deadline.
If the prediction by Defense Undersecretary Ellen Lord proves accurate, the LRIP-12 negotiations would wrap up only six to seven months behind schedule. Since LRIP-1 aircraft were ordered in 2007 and delivered in 2009, the schedule for each follow-on F-35 contract can be tracked by adding six to the LRIP lot number for the year of order and adding eight for the year of delivery. Thus, LRIP-12 aircraft should have been ordered in 2018, but the delayed contract award does not change the scheduled delivery year of 2020.
The LRIP-12 contract also moves the program closer to an overall multi-year procurement. The contract includes pricing for a three-year block by international partners. But domestic law prevents the JPO from signing a multi-year contract for a weapon system before it reaches full-rate production. So the U.S. contract is for a single lot for LRIP-12, along with priced options for LRIP-13 and LRIP-14.
In 2018, the JPO confirmed that the long-term plan was to convert the U.S. orders to a multi-year procurement starting in the first lot of full-rate production, which begins with LRIP-15 aircraft ordered in 2021 and delivered in 2023.
But Lord, who oversees acquisition and sustainment, says a multi-year procurement contract is no longer part of the negotiating strategy for the U.S. orders.
“I’m not sure I would call it a goal. It’s under consideration,” Lord said, responding to a question from Aerospace DAILY. “There’s a question of the benefits to doing that, plus the negatives to doing that. Any decision I make will be a data-driven decision and right now we’re still collecting the data.”
Lord’s comments echo the prepared testimony for Vice Admiral Mat Winter, the F-35 program executive officer, who appeared as a witness on May 2 before the House Armed Services Committee.
“To date, the return-on-investment provided by our industry partner in regards to a Multi-Year procurement does not support proceeding with this acquisition approach,” Winter’s prepared testimony says.
The Pentagon usually requires a contractor to slash unit prices by at least 10% to justify a multi-year procurement deal.
As the program finalizes prices for the last three years of LRIP, Pentagon officials appear to be shifting focus away from unit costs to tackle the F-35’s current cost to operate per flight hour, which stands now at $44,000.
“We will continue to look at how to not only [get] the unit cost of the aircraft down but just as importantly, if not more importantly right now, I am focused on the cost per flight hour and the mission capability of the aircraft,” Lord said.
The flyaway unit price for the F-35A appears to be falling faster than program officials expected. Several years ago, the JPO set a goal to lower the unit price for each F-35A to $80-85 million, with the lower number representing an 11.5% cost reduction from the $89.2 million price for LRIP-11 aircraft.
With offering the with a recurring unit cost of $80 million, Lockheed now believes the F-35A can be cheaper by LRIP-14 for aircraft delivered in 2022.
“While it’s premature to discuss specifics as negotiations continue, we are absolutely confident that the final agreement for aircraft in Lots 12-14 will include an F-35A price below $80 million for Lot 14 in 2020, per our long standing commitment,” Lockheed says in a statement. “This represents equal or less than the procurement cost of legacy jets, while providing a generational leap in capability.”