The US Department of Defense reportedly plans to rework the way it buys spare parts for its fleet of Lockheed Martin F-35 Lightning II jets.
According to US media, the reforms will replace a payments for parts and services rendered model with performance-based logistics (PBL) – under which the contractor would be paid based on specific performance outcomes.
The shakeup has been dubbed a cost-cutting measure that would save the Pentagon, and consequently US taxpayers, money while improving spare parts availability.
However, the fact that PBL is a purchase model which Lockheed Martin itself has been aggressively lobbying for since 2019 raises questions about its true purpose and efficacy.
The DoD’s F-35 Joint Program Office hopes to award a PBL agreement limited to spare parts (but not support and sustainment, as proposed by Lockheed), for a five-year term, pending a review by the Cost Assessment and Program Evaluation Office for Congress.
F-35 Joint Program Office product support manager Ed Apollo expects a PBL-based agreement on spare parts to push the defense giant to improve parts' longevity. "The lower the demand, the more gravy for industry. The higher the demand, the less the [profit] margins [are]. That is the number one benefit that we're looking at in the performance-based logistics contract," he said.
Brad Martin, director of the National Security Supply Chain Institute at Rand Corporation, a Washington-based security-focused think tank, warned that PBL contracts will essentially result in the Pentagon ceding "an awful lot of discretion" to defense companies "as to how they’re going to fill the orders and how they’re going to deal with the demand."
Martin expects PBL to stimulate Lockheed to build up inventories of parts sufficient for peacetime operations, but questions whether the new purchasing scheme, which deprives the military of the ability to control to the last screw how many parts must be bought, will be adequate in event of a major conflict. Such a shakeup would likely result in an exacerbation of the jet's existing "just in time" supply chain problems – in which a single issue anywhere along the line threatens to ground planes and leave them unusable.
But the Pentagon is apparently placing its hopes on the idea that change will mean improvement, given that under today’s model, the US F-35 fleet’s faces an overall mission capable readiness rate of just 56 percent (below the 70 percent sought by the Air Force, and 75 percent by the Navy).
Dan Grazier, a defense analyst at the Project on Government Oversight, a Washington-based non-profit, says that that a rejiggering of the F-35’s parts purchase contracts by the Pentagon – which is by far the biggest buyer of the plane, might also affect the other countries which have bought it. "Who knows what some of these partner countries might get themselves into moving forward?" he asked.
The F-35 – Lockheed's promised do-it-all multirole fighter for the Air Force, Navy and Marines, is the largest defense contract in history, with a total expected purchase and sustainment price tag of more than $1.7 trillion and climbing, and an individual unit price tag of $70.2-$89.3 million.
The US and Israel have already made limited use of the F-35 in combat against ill-equipped terrorist groups and small drones. However, the aircraft have never come up against the aircraft or air defenses of a major peer adversary. Nearly a dozen US and allied F-35s have crashed or been lost, including a fatal incident involving a Japan Air Self-Defense Force F-35A in 2019 which left its pilot dead.
Years after its introduction, the plane continues to suffer a series of significant (and costly) bugs, glitches, and hardware problems, from cabin overpressurization to software issues. In 2022, the Government Accountability Office reported that there were four "Category 1" deficiencies and over 800 “Category 2” problems with the plane.
On top of that, the F-35’s top adversaries have been working around the clock to defeat its systems. Last week, for example, the chief of Iran’s top military electronics concern revealed that the Islamic Republic had developed technologies allowing Iran to identify the radar signature of individual F-35 jets using advanced homegrown radar systems.