F-35 JPO ramping up PBL analysis

The F-35 joint program office is ramping up its analysis of a possible performance-based logistics sustainment contract with Lockheed Martin, according to a notice posted this week.

In a new justification and approval document, the Navy-led tiger team details its reasons for extending a contract with Systecon North America for consulting services as it finalizes the JPO's assessment and response to Lockheed's proposal for a five-year PBL deal the company says could save the program about $1 billion.

The extended contract, which was awarded in July, runs through the end of October and funds additional modeling and simulation "focused on material provisioning, support planning and sustainment to optimize readiness, technical performances and affordability," the notice states.

"As the program approaches milestone C, this requirement will provide current F-35 cost and performance modeling to establish a PBL sustainment baseline," the J&A notes. "Independent cost and performance modeling is currently not in alignment with the F-35 JPO models and the requirement is for an independent source to provide actual F-35 JPO models in comparison to outside industry recommendations."

As part of Lockheed's initial proposal, which it revealed to reporters last September, the company would invest an initial $1.5 billion in seed funding to pay for initial spare parts and capacity. Over five years, the company projects the agreement would save the government about $2.5 billion, minus its $1.5 billion investment, which would be returned to Lockheed.

The company has said, based on its projects, the deal could help the program achieve its goal of reducing the F-35's cost per flying hour to $25,000 by 2025 if the Pentagon implements the plan in 2021.

In November, the Pentagon established a Joint Independent Assessment Team, led by Navy acquisition executive Hondo Guerts, to consider the deal. Guerts told Inside Defense in January his team was considering a range of possibilities -- from a full PBL to something "in between" a PBL and a more traditional annual sustainment contract.