Lockheed expects sustainment RFP this spring

A Lockheed Martin official said today the company expects the Air Force to issue a request for proposals this spring for an F-35 performance-based logistics sustainment contract.

Greg Ulmer, who recently transitioned from his role as Lockheed's F-35 program lead to executive vice president for the company's aeronautics business, told reporters today the company continues to work with the Defense Department on a possible PBL construct, which officials have said is key to reducing long-term sustainment costs.

"In our sustainment business, we are currently delivering F-35s that are below the cost of less-capable fourth-generation aircraft while also lowering Lockheed Martin's portion of sustainment . . . by 40% over the last five years, and we expect to reduce another 50% over the next five," Ulmer said.

Lockheed announced in 2019 that it had pitched a plan to the Pentagon for a five-year PBL that it says could save $1 billion and help achieve the program's target to reduce the F-35's cost-per-flying-hour to $25,000 by 2025. In early January, DOD awarded the company a $1.28 billion undefinitized contract action for sustainment work that extends through June.

Ulmer said today the company is seeing progress on sustainment costs and believes the $25,000 CPFH goal is still "doable."

As for production efficiency and air system affordability, Ulmer said there's pressure in the current negotiations for low-rate initial production lots 15, 16 and 17 to keep costs down. He noted that the three-year block buy includes about 100 fewer aircraft than the previous three lots combined and will incorporate a key technology refresh, TR3.

"We're working to keep a cost-neutral position for the cost of the F-35 production system," he said.

The company is also awaiting Pentagon approval of a full-rate production decision that was originally expected in December of 2019 and likely won't occur until later this year due to initial operational test and evaluation delays. Asked whether the FRP delay has a tangible negative impact on the company, Ulmer said the wait hasn't been detrimental to Lockheed but it has stalled the program's transition to longer-term, multiyear contracts.

"The benefit from a full-rate production decision would be our ability to go to a longer period of performance -- think five-year, maybe seven-year . . . which will then allow industry to make a bigger investment or get a bigger economic order quantity value," he said.