WASHINGTON — A list of options to decrease costs on the F-35 is on the desk of Defense Secretary Jim Mattis and awaiting action, the Pentagon's F-35 program chief said Wednesday.
"We've got a compendium of many kinds of initiatives that have already started or that we will start in the future. That compendium is up for review with the secretary of defense as we speak," said Lt. Gen. Christopher Bogdan, the F-35 joint program office (JPO) head. "I can't comment on what he's going to do with that, whether he is going to pick from it like a menu or say, 'Go do all of these.'"
Some items on the menu include contracting options that would allow the government a discount for buying in bulk, including block buys, economic order quantity and multiyear purchases. Other options involve changes to training and operations that would slash overall cost, such as relying more on simulator training instead of expensive live red air exercises, he said during a speech at the McAleese/Credit Suisse conference.
The JPO also wants to put increased pressure on F-35 prime contractor Lockheed Martin and its supply chain. Bogdan pointed out that his affordability goals have changed over the past several years: instead of wanting an $85 million F-35A unit cost by 2019, Lockheed will be expected to offer an $80 million dollar A-model by 2020.
To get there, Lockheed most likely will have to scrutinize its supply chain and cut out companies that bring little value — such as a middleman that issues a purchase offer to a supplier on Lockheed's behalf.
"There are things that industry could be doing today to drive costs out of this airplane that they ought to be doing themselves, and if they don't, then the government is going to help them do it. Like de-layering the supply chain, for one," he said. Lockheed's first cost initiative, called the Blueprint for Affordability, captured the "low-hanging fruit," netting savings that were "just okay," but Bogdan said more could be done to manage low-tier suppliers.
The JPO’s "affordability compendium" is just one half of two F-35 related studies ordered by Mattis in January. The second review, which is still in progress, will evaluate the Navy’s F-35C against the advanced Super Hornet, rebranded by Boeing as the F/A-18E/F Block 3.
"That is drawing nearer to end, but it's not over yet," said Bogdan. For that assessment, the JPO will provide information on the current capability of the F-35C in a high-end fight both now and in the future, and the current and projected operating and unit costs for the carrier-launched variant. The Navy will provide similar data about the Super Hornet and potential upgrades.
The F-35 program head was confident the data will show that, although there may be a need for the Navy to buy more Super Hornets, the F/A-18 cannot replace the capabilities of the joint strike fighter.
"They need fifth-generation airplanes and they need some fourth-generation airplanes, and they need them soon. So what I think you're going to see the Navy do is buy as many F-35Cs as they can afford, and maybe supplement that with as many other things as they can afford. But they just need airplanes," he said.
"You can't substitute a Super Hornet for an F-35C in the high-end fight. It doesn't work. You might be able to afford more Super Hornets, but they're going to die in a high-end fight, and I don't know how economical that is," he added. "And everybody recognizes that. But that's not to say that there's not a right mix out there. Because we're not only going to fight the high-end fight, we're going to fight mid-fights and low-end fights too."
'On to Lot 11'
With a contract for the F-35’s tenth lot of low-rate, initial production in the bag, Bogdan mimicked New England Patriots’ coach Bill Belichick in describing his focus on the next deal.
"We are on to lot 11. We need to get lot 11 on contract sometime between this summer and this fall simply because the next contract is a combination of lot 12, 13 and 14 put together, and that’s going to take some time to get through with industry," he said.
Negotiations for lots 9 and 10 — which took more than a year to complete — helped the government understand the cost of the airplane so that a deal for lot 11 "should not be that controversial," Bogdan said before knocking on a wooden podium behind them for good luck.
"We'll see what happens, but we need to get done this summer, no later than the fall, so we can get onto the much bigger lot 12, 13 and 14, which encompasses over 430 airplanes. That will be a huge, huge contracting action," he said.