U.S. Dept. of Defense / Lockheed

Lockheed Draws $1.9B Service Deal for F-35s

Jan. 8, 2020
Pentagon's annual sustainment contract covers operations, mission readiness, and cost reduction

Lockheed Martin Corp. entered into a $1.9-billion, one-year agreement with the U.S. Dept. of Defense's F-35 Joint Program Office, to support 2020 operations and sustainment for the global F-35 fleet, and to improve mission readiness and continue to reduce operational costs. The annual contract (through December 31, 2020) funds the sustainment activities for over 400 F-35 aircraft currently in service, "and builds enterprise capacity to support the future fleet of more than 3,000 F-35 aircraft."

Sustainment services includes experts to support base and depot maintenance, pilot and maintainer training, and sustaining engineering across the globe. It also covers fleet-wide data analytics and supply-chain management for part repair and replenishment to enhance overall supply availability for the fleet.

The F-35 is a series of three different, single-engine aircraft designed for ground attack and combat, and deployed by the USAF, USMC, and USN, and the defense forces of multiple allied nations. The program has been under steady scrutiny and criticism for the high cost of individual aircraft, and program lead contractor Lockheed and other contractors have made steady efforts to contain the costs for future deliveries.

In recent years, the Pentagon also has raised concerns about unexpectedly high costs for maintaining and upgrading the F-35 aircraft while in service.

Last fall, Lockheed and the DoD reached a $34-billion agreement for a total of 478 new F-35 jets to be supplied through the next three production series, reducing the unit cost to $77.9 million currently, below the $80-million target.

Lockheed also noted that the sustainment cost per aircraft per year has decreased four consecutive years, and more than 35% since 2015. It reported that the F-35's reliability continues to improve, with +65% mission capable rates for the global fleet, and operational squadrons consistently performing near 75%.

"The F-35 continues to deliver exceptional capabilities to the field, and this contract ensures F-35s are mission ready to meet warfighter needs," stated Greg Ulmer, Lockheed Martin vice president and general manager of the F-35 program. "The joint government and industry team continues to make significant progress improving readiness rates and reducing sustainment costs. In 2020, we will continue to optimize and advance the sustainment system. We are confident F-35 sustainment costs will be equal to or less than legacy jets."

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