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2-star F-35 chief raps Lockheed relations

Sep. 18, 2012 - 10:19AM   |   Last Updated: Sep. 18, 2012 - 10:19AM  |  
The Air Force general nominated to head the F-35 program said Sept. 17 that "it should not take 10, 11 or 12 months to negotiate a contract with someone we've been doing business with for 11 years."
The Air Force general nominated to head the F-35 program said Sept. 17 that "it should not take 10, 11 or 12 months to negotiate a contract with someone we've been doing business with for 11 years." (Air Force)
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The general tapped to head the F-35 Joint Strike Fighter effort called the relationship between contractor Lockheed Martin and the program office "the worst I have ever seen," expressing frustration with the company's continued performance and production woes.

Maj. Gen. Christopher Bogdan, the F-35 deputy program manager, said the Pentagon would no longer funnel cash into the program should development issues continue. Bogdan also expressed frustration that the Pentagon and the company have not been able to ink a deal for the fifth production lot of aircraft after nearly a year.

"It should not take 10, 11 or 12 months to negotiate a contract with someone we've been doing business with for 11 years," he said at a Sept. 17 speech at an Air Force Association-sponsored conference. "There's something fundamentally wrong with that. We've got to fix it."

These were Bogdan's first public comments since becoming the program's deputy five weeks ago. Defense Secretary Leon Panetta has nominated Bogdan to head the program and replace Vice Adm. David Venlet, who is retiring.

The comments caught Lockheed, the F-35 prime contractor, off guard as program brass sat in the front row during his speech stone-faced. Bogdan called the fractured relationship between the Pentagon and Lockheed "the biggest threat to this program today."

Bogdan, who previously served as the head of the Air Force's KC-46 tanker program, is credited with righting that long-troubled program. The service locked in a fixed-price deal with Boeing in 2011.

"We're going to be on a journey in our program office," Bogdan said. "And that journey starts off with the recognition … that if we do not improve the way we deal on a day-to-day basis with Lockheed Martin, then we're not going to get there."

Bogdan said the Pentagon expects Lockheed to be further along the learning curve, considering it is building its fifth batch of F-35 jets. While the cost of building jets is declining, those numbers are not declining at a fast enough pace, he said.

The Pentagon gave the program "a great gift" earlier this year when it restructured the F-35 program, injected billions of dollars and adding 30 more months of development, Bogdan said. As part of that restructure, the Pentagon removed 179 jets from its procurement schedule over the next five years.

"We will not go back and ask for any more, simple as that," he said. "This is fundamentally a fixed-price development program."

"Certainly, we've communicated to [Lockheed] that the department is done with major restructures that involve transferring billions of dollars into the F-35 program from someplace else in the defense budget," Air Force Secretary Michael Donley said during a briefing after Bogdan's speech. "We've done that a couple of times but there's no further flexibility or tolerance for that approach."

If more significant problems pop up during development, the Pentagon might reduce its buy of aircraft, the secretary said.

Donley, who has been dual-hatted as the service's acquisition chief, said the Pentagon and Lockheed will "eventually bridge our differences" during the negotiations for the fifth batch of F-35 aircraft.

Lockheed Martin spokesman Michael Rein said the company agrees with Bogdan "that it takes everyone to be fully engaged to be successful."

"Lockheed Martin will continue to work with the F-35 Joint Program Office team to successfully deliver the F-35's 5th Generation fighter capabilities to the war fighter," Rein said. "We remain committed to continuing our work to solve program challenges and build on the momentum and success we've achieved during the past couple of years."

Bogdan said he sees "a glimmer of hope" that production is improving, however that has not translated into dollar savings.

"If you're getting better in production, then you ought to be passing that getting-better-off to the taxpayer," he said. "I'm going to want to see that here really soon from our partners, both on the engine side and the airplane side.

"I believe they're right on the edge of getting really, really good at this, now I want to see them take that and translate it into lower costs for production on this airplane," he continued.

The general said the strategy for sustaining the Pentagon's 2,443 F-35s "is wrong and it needs to be changed." Estimates peg the lifetime sustainment cost of the F-35 as high as $1.1 trillion.

Bogdan suggested that competition and performing sustainment work within the military might help lower those cost estimates.

"The basic strategy on the way we're going to sustain this airplane has got to make some fundamental changes," he said.

Bogdan also said the Pentagon's restructured F-35 plan "is potentially achievable" and that officials "can see the light at the end of the tunnel." Still, many problems exist.

Issues with the "Autonomic Logistics Information System" (ALIS) software and helmet still continue to plague the program's progress.

Over the past two years, software development has fallen 90 to 120 days behind schedule. The company is delivering jets with Block 2A software. They are readying to field Block 2B software. Operational jets will have a "very, very complex" version of software, called Block 3.

The next version of ALIS software, called 103, is expected to be up and running by the end of November, around the same time the Marine Corps plans to start basing aircraft at Yuma.

The Pentagon has not accepted "a bunch of airplanes" at Lockheed's production facility in Fort Worth, Texas, because the updated logistics system is not in place.

Problems with the helmet, built by VSI, are still causing problems.

"You cannot go to war and you cannot fight with this airplane unless you have a helmet that works," Bogdan said. "Today, we have a helmet that works in a very rudimentary way."

The program has a plan in place to correct the issues, however, all of the fixes might not be completed by 2015, when the Marine Corps wants to declare its jets battle ready.

To address these issues, one test aircraft is being dedicated solely to helmet testing. Over the next 60 to 90 days, the program intends to gather a copious amount of helmet information.

The program is still evaluating a second "back-up" helmet built by BAE Systems.

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