A F-35 lands at Pax River. (file)

COLORADO SPRINGS: The House Armed Services Committee’s draft policy bill slams the F-35 Joint Strike Fighter program on its astronomical costs — and puts in place language that could both constraint the number of the fifth-generation fighters procured by the Defense Department and affect prime contractor Lockheed Martin’s sustainment work share.

Chairman Adam Smith’s markup of the 2022 National Defense Authorization Act (NDAA), obtained by Breaking Defense, sets “Affordability, Operational, and Sustainment Cost Constraints” for the F-35 program, based on the “affordability targets” assessed by the Air Force, Navy and Marines of the three fighter variants. (The full committee is set to vote on the draft on Sept. 1.)

In essence, this language means that budget planners would have to take into account the long-tail costs of sustaining the jets — a longstanding issue for the F-35 — in order to decide how many of the fighters they can afford to maintain in their eventual fleet. The move, if passed by both sides of Capitol Hill, could ultimately force the Air Force, Navy and Marine Corp to downsize their overall planned fleet size.

Including jets already procured, the Air Force has the biggest buy planned, with 1,763 F-35A variants. The Navy is planning for a fleet of 273 of the carrier-based F-35Cs, and the Marines, up to 353 of the vertical take off and landing capable F-35Bs.

Last month, the Government Accountability Office (GAO) smacked the F-35 program for its ever-increasing sustainment costs that the congressional watchdogs say are simply not affordable.

Per the GAO: “DOD plans to acquire nearly 2,500 F-35 aircraft for about $400 billion. It projects spending another $1.27 trillion to operate and sustain them—an estimate that has steadily increased since 2012. The military services collectively face tens of billions of dollars in sustainment costs that they project will be unaffordable. For example, the Air Force needs to reduce estimated annual per-plane costs by $3.7 million (47%) by 2036, or costs in that year alone will be $4.4 billion more than it can afford.”

DoD asked for some $12 billion in its fiscal 2022 budget request to buy 85 F-35 JSF aircraft; with the Air Force accounting for the bulk of the procurement plan with 48 jets at $4.5 billion. However, the Air Force broke with tradition by failing to include extra jets in its annual “unfunded priorities” wish list of equipment that didn’t make the budget chop inside DoD, precisely due to concerns about affordability. Overall, the HASC language would cut the budget for F-35As by $194.1 million and the F-35C by $63.3 million, while keeping the F-35B stable.

The HASC draft bill also requires Secretary of Defense Lloyd Austin to submit a report, no later than March 1, 2022, on sustainability costs — before the F-35 Joint Program Office can move to a performance based logistics (PBL) contract with prime contractor Lockheed Martin.

The HASC draft requires a “detailed description and explanation of, and the actual cost data related to, sustainment costs for the F–35 aircraft program, including an identification and assessment of cost elements attributable to the Federal Government or to contractors (disaggregated by the entity responsible for each portion of the cost element, including at the prime contractor and major subcontractor levels) with respect to such sustainment costs.”

Lockheed Martin for some time has been pushing to move from today’s annual contracts to a five-year PBL deal to start in 2023, asserting that this would significantly cut sustainment costs by allowing the prime and its subcontractors to better invest in efficiency measures.

Competition 

Smith’s markup specifically calls out the need for greater industrial competition in the F-35 program, on the basis that doing so would drive down costs. Critics of the program have pointed out that Lockheed controls the vast majority of the sustainment work, and hence has little incentive to give best prices to the government customer; the company has responded that as the maker of the jet, it is best positioned to manage the technical challenges on the advanced design.

The HASC language reads:

The committee is concerned about rising sustainment costs in the F-35 program, as these costs create affordability challenges for the services. As such, the committee is interested in determining the Department of Defense’s plans to increase competition within the F-35 enterprise, including what intermediate steps could be taken in the near term to leverage the whole of industry outside the original equipment manufacturers. Increased competition for F-35 sustainment could reduce lifecycle costs, increase efficiency, and drive innovation while strengthening the overall viability of the program.

Therefore, the committee directs the Secretary of Defense to provide a briefing to the House Committee on Armed Services not later than March 1, 2022, on the Department’s efforts to reduce sustainment costs by driving competition into the F-35 program. The briefing should include information on known barriers that must be overcome to facilitate a competitive sustainment environment, as well as recommended solutions. 

The bill further would require DoD’s undersecretary for acquisition and sustainment to submit to congressional defense committees “an acquisition strategy for continued development, integration, and operational fielding of the Adaptive Engine Technology Program propulsion system,” into the Air Force F-35A fleet beginning in 2027.

Under that program, the service has been testing prototypes of more powerful engines built by current F-35 engine maker Pratt & Whitney, as well as General Electric, for possible future upgrades to the fighters.