Lockheed Martin
The F-35 Lightning II is a single-engine aircraft designed by Lockheed for ground attack and combat. Current delivery costs for the three variants are $89.2 million/unit for the F-35A (shown here); $115.5 million/unit for the F-35B; and $107.7 million for the F-35C.

Lockheed Extends Long-Term Contracts to F-35 Suppliers

April 18, 2019
Multi-year Performance-Based Logistics contracts and Master Repair Agreements are intended to promote longer-term investments, cost-cutting strategies, and process efficiencies

Lockheed Martin reported has shifted several F-35 suppliers to multi-year "performance based logistics" contracts, which is meant to allow the companies to make longer-term investments, implement cost-cutting strategies, and enhance their process efficiencies. For example, Lockheed noted that a PBL contract placed with BAE Systems in 2017 for the electronic warfare subsystem has resulted in a 25% improvement in that subsystem's availability.

"As the F-35 fleet expands, we are partnering with our customers and taking aggressive actions to enhance F-35 readiness and reduce sustainment costs," stated Greg Ulmer, Lockheed Martin vice president and general manager of the F-35 program.

The suppliers covered by the new PBLs are BAE Systems, Northrop Grumman and Collins Elbit Vision Systems (CEVS). Lockheed did not detail the length of the new PBL contracts.

Lockheed also issued 12 "master repair agreements" with F-35 suppliers, including Honeywell, General Electric, and Eaton Corp. MRAs are meant to enhance the suppliers’ capacity and speed for repair programs.

Lockheed Martin is the primary contractor for the F-35 Lightning II Joint Strike Fighter, the Stealth-enabled single-engine aircraft in use by the U.S. Air Force, U.S. Navy, and U.S. Marine Corps, and the defense forces of multiple allied nations.

More than 350 of the aircraft have been built and deployed since 2006, but the F-35 program has been under steady scrutiny and criticism from the U.S. Dept. of Defense and U.S. Congress for the high cost of individual aircraft, and Lockheed and other contractors have made steady efforts to contain the costs for future deliveries.

Current reported delivery costs for the program are $89.2 million/unit for the F-35A; $115.5 million/unit for the F-35B; and $107.7 million for the F-35C.

In addition to the high delivery costs, the aircraft have incurred unexpectedly high maintenance and operating costs.

"The F-35 global supply chain is a key enabler to success, and we're restructuring and streamlining several contracts with key industry partners to provide the long-term stability that will allow them to make investments, improve efficiencies and optimize their performance," Ulmer stated. "This is one of several actions we're taking across the supply chain to improve capacity, reduce costs, and enhance supply availability."

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Angel DelCueto | Lockheed Martin
Assn. for Advancing Automation