LM LRIP 9/10: Tech Investments Cut Costs of F-35 Jets

[spazsinbad]

Lockheed: Tech Investments Cut Costs of F-35 Jets
18 Feb 2015 REUTERS (Reporting by Andrea Shalal; Editing by Ken Wills)

"Lockheed Martin Corp said a series of manufacturing changes and technology investments were already driving down the cost of the F-35 fighter jet, and the savings were set to triple in the ninth batch of jets to be produced....

...Martin said changes already adopted had trimmed the cost of each jet in the eighth production lot by $260,000, and those savings were slated to triple in the ninth batch, which includes 57 jets, for cumulative savings of over $1 million per jet.

Lockheed has submitted a proposal to the Pentagon for the ninth and 10th batches of jets, with an eye to completing those contract by the end of the fiscal year.

Martin said the program was on track to realize its overall goal of cutting the cost of producing the jets by $1.8 billion by 2019, or $10 million per jet, with a goal of achieving a cost of $80 million per jet by 2019, including inflation...."

Source: http://www.foxbusiness.com/industries/2 ... f-35-jets/

[spazsinbad]

I guess this info could go in the 'other' section however it does explain more about the ABOVE & LRIP is mentioned, so I'll put it here:

Lockheed outlines F-35 cost-cutting production changes
18 Feb 2015 Dan Parsons

"...Including the engine, an F-35A now costs between $110 million and $115 million.

An example is simplifying the way Lockheed creates the diverterless supersonic inlet (DSI) bump inside the aircraft’s two engine intakes. They now are created using a 5h process that requires a robot to build up coats of paint like layers of a pearl.

A new approach involves a second robot that inserts an injection mould into the engine inlet and fills it with a precise amount of stealth coating and allows it to cure. The process does not have to be done in the paint barn and allows work on other parts of the fuselage because it does not produce paint fumes or spray.

Lockheed spent $742,000 to develop the new process and projects to save $6,000 per aircraft once implemented before the end of 2015. Over the life of the programme, that translates to $27 million.

Some production changes were derived from lessons learned building the existing 120-plus F-35s. Instead of buying aluminium in 5,896kg (13,000lb) chunks and machining them into bulkheads, Lockheed now buys 3,760kg bulkhead blanks that require much less finish work.

“This is not a big technology one, this is a maturity one. But we had to change the engineering drawings. We had to get it approved and it bought its way onto investment.” she says. “When you build a house, you don’t go out and buy a tree, you buy two-by-fours. That’s what we’re doing. We were buying the tree and we went down to the exact bulkhead we need.”

For an investment of $652,000, Lockheed will be able to eliminate $65,000 per aircraft, Martin says. In another example, the company reworked the way it drills thousands of holes through F-35 components. Instead of using an oil-based coolant for its metal-drilling bits, it plans to use compressed liquid nitrogen to cool the bits to below freezing...."

Source: http://www.flightglobal.com/news/articl ... es-409221/

[bring_it_on]

Lockheed Martin demonstrates F-35 productivity improvements

Lockheed Martin is making its F-35 Lightning II Joint Strike Fighter production line more efficient in a drive towards a USD80 million (adjusted for inflation) target cost for the conventional takeoff and landing (CTOL) A-model of the stealthy combat aircraft by 2019, the company's programme director said on 18 February.

"Every month, every week, new projects get approved," said Lorraine Martin. "And as I go through negotiations, we'll roll that right in."
The improvements are part of a 'blueprint for affordability' unveiled by the company last year. To date, Lockheed Martin has evaluated 131 proposals for cost-saving reductions, 58 of which have been implemented, said Martin. She told reporters that the ideas were generated by the company and its suppliers.
Lockheed Martin, with its two main industry partners on the project, BAE Systems and Northrop Grumman, has pledged to spend USD170 million over two years on the initiative. The Pentagon plans to spend another USD300 million on additional such efforts if Lockheed Martin and engine manufacturer Pratt & Whitney succeed in bringing the cost per aircraft, including the engine, to USD80 million by 2019, Martin told reporters. The government would save some USD1.8 billion under the effort, she added.
One example of an efficiency project already being implemented is a new method for creating the diverterless supersonic inlet (DSI) bump inside the F-35's engine intakes. They had been created using a robot to build up layers of paint in a paint barn, but now a different type of robot will insert an injection mould into each inlet and fill it with the stealth coating precisely right on the production line while work continues on other parts of the fuselage. Development of the new process cost USD742,000 but is expected to save USD6,000 per aircraft and around USD27 million over the life of the programme.
By already including such savings in the low-rate initial production Lot 8 (LRIP contract, Lockheed Martin will have to stand by the savings projection built into the unit price. If, for example, a project like the new DSI coating method is expected to save USD6,000 per aircraft, Lockheed Martin will either gain a return on any excess savings or lose the difference of the savings do not materialise. "Whatever I sign up to build it for, that's all I'm going to get," said Martin.
She said the company offered efficiency products set to yield USD260,000 per aircraft in LRIP 8, the contract for which was signed in 2014. LRIP 9, which is to be negotiated along with LRIP 10 later this year, is expected to offer savings of nearly USD1 million per aircraft.

Analysis

The Pentagon's F-35 Joint Program Office previously told IHS Jane's that the government was involved in "a number of initiatives" to reduce the cost of the aircraft and could invest the additional USD300 million over three years if Lockheed Martin's plan yields the expected savings. Further, the Pentagon's F-35 manager, Lieutenant General Christopher Bogdan, has said that unit costs would also fall sharply due to economies of scale if the United States and its allies remained committed to buying significant numbers of aircraft over the next three to five years as production is expected to triple in that time.
The unit cost of the CTOL A-model of the aircraft being purchased by the US Air Force (USAF) and several international customers was approximately USD115 million in fiscal year 2015 (FY 2015) and has fallen to USD88.1 million in FY 2016 when the engine cost is factored in, already below the expected price that factors in the production ramp. In total, there has been a 57% reduction in unit price from Lot 1 to Lot 8, according to IHS Jane's analysis.
As Lockheed Martin executives have said, the long-term goal is to cut some USD10 million per year from the aircraft's unit cost over the next three to five years. The company and the US government have long said they would like to sell the aircraft for no more than USD80 million at the production peak.

http://www.janes.com/article/49141/lock ... provements

[spazsinbad]

Pentagon ‘Very Close’ to F-35 LRIP 9 Deal
24 Mar 2016 Valerie Insinna

"The Defense Department is closing in on a deal with prime contractor Lockheed Martin for the next two batches of joint strike fighters, according to the F-35 Joint Program Office (JPO).

The department is “very close” to a contract for the ninth lot of low rate initial production (LRIP) jets and expects an LRIP 10 award by the end of April, JPO chief Air Force Lt. Gen. Christopher Bogdan said March 23. The two lots, totaling about 150 jets, would be worth about $15 billion total.

The joint program office is negotiating LRIP 9 and 10 together and may still award both contracts at the same time, he told reporters after a House Armed Services tactical air and land forces panel. However, the LRIP 10 award is dependent on Air Force Secretary Deborah Lee James’s certification that the F-35As delivered in fiscal year 2018 will be fully equipped with the final block 3f software.

Before Bogdan is willing to recommend that James certify the aircraft, he wants to ensure that two problems with the software are resolved.

First, he wants to fix a “software stability” issue that causes the sensors to shut off because of communication delays between the sensors and the aircraft’s main computers (Defense Daily, March 23). It’s not uncommon for sensors to be restarted midflight, but the F-35s current rate of one shut off per four flight hours is unacceptable and needs to be improved so that they restart only once every eight or 10 hours, he said. Lockheed has since delivered a number of potential fixes to the problem that the program office will begin flight testing next week, and the JPO expects to know whether those work by mid-April.

The program office is also reworking its weapons test plan so that it does not delay the 3f software certification, said Bogdan, who expects to finalize a new test plan in April.

“If we do it the way we used to do it, it's going to push out 3f in the weapons capability. So we're coming up with a new way to test the weapons in sort of a surge mode where we're going to deploy a team of testers and weapons experts … and just focus for a month or two on weapons testing,” he said. “When I see that plan, and I know what's going on with the stability on the software, then I’ll be able to hand the secretary of the Air Force with confidence my recommendation that she can certify."

On the contracting side, the JPO will carry on with negotiations with Lockheed and have as much as possible finalized on the LRIP 10 deal, he said. The hope is that when James makes her certification, the only step left to finalize the LRIP 10 award will be getting Bogdan’s signature.

"We can do everything we want right up until the minute I sign LRIP 10,” he said. “So I can have a handshake, we can have that deal done. Lockheed Martin can do their sweeps and get the contract ready. They can actually sign the contract. I just can't sign it until she does.""

Source: http://www.defensedaily.com/pentagon-ve ... ip-9-deal/

[jessmo111]

Spaz why aren't they combining lrp lots 9,10
With that massive partner order? Isnt there a large block buy being negotiated?

[spazsinbad]

No need to ask ME a specific question. The answer has been mentioned many times about the offer to combine LRIP purchases for foreign buyers with USA joining a year later. At this point the furriners have about five months to make up their minds - but for future LRIPs. LRIP 9/10 negotiations have been in play for more than one year now.

ADDED from Oz thread out of 'popcorn': viewtopic.php?f=58&t=23043&p=316395&hilit=Bogdan+LRIP#p316395

Bogdan: Australian F-35 Block Buy Still Possible
25 Feb 2016 Nigel Pittaway

"CANBERRA, Australia — The head of the F-35 International Joint Program Office told Australian officials that a block buy across low rate initial production lots 12, 13 and 14 is still possible despite the US services not being able to fully participate.

US Air Force Lt. Gen. Christopher Bogdan was in Canberra to testify at a Senate inquiry into Australia’s purchase of 72 F-35A aircraft to replace its F/A-18A/B Hornet fleet. Prior to the Senate hearing and on the eve of the release of Australia’s defense white paper on Wednesday, he briefed Australian reporters on the Joint Strike Fighter program.

The US has told the program office that it cannot participate in a block buy of jets until at least LRIP 13.

“There is a way that you can start a block buy for the partners and the FMS [Foreign Military Sales] customers in [LRIP] Lot 12, and have the US services join in Lot 13,” he said.

“You won’t get quite as much savings but in fact, most of the savings in that scenario falls to the US services, because they didn’t come in early. So for the partners it’s still a good value proposition and we are still pursuing it.”..."

Source: http://www.defensenews.com/story/defens ... /80920054/

[Dragon029]

Spaz why aren't they combining lrp lots 9,10
With that massive partner order? Isnt there a large block buy being negotiated?

Negotiations take quite a while (hence why the LRIP 9 contract has been delayed from November last year). Rolling in another 3 or so LRIPs would make such negotiations take forever.

The big LRIP 11/12/13 (which includes the start of FRP) bulk buy is still (to my knowledge) being worked on, but may exclude the orders of the US if Gilmore is correct in his assertion that a proper bulk buy is illegal, and if US Congress, etc aren't willing to provide some form of exemption. In terms of scale, that foreign-partners-only bulk buy would still make up something like half of all F-35 production over that period, meaning there would still be considerable savings.

[spazsinbad]

Article says LRIP 10 extra although first paragraph says 'eleven' (perhaps that is the volume? ) Anyhoo news is news.

Lockheed Martin Gets $1.3 Billion For F-35 Plus-Ups
03 May 2016 Lara Seligman

"WASHINGTON — The Pentagon has awarded Lockheed Martin a $1.3 billion contract for advance work on 13 F-35s added to an 11th batch of joint strike fighters during budget negotiations last year, according to the program office.

The contract includes six Marine Corps F-35Bs, three Air Force F-35As and four Navy F-35Cs, according to an announcement Monday. Work will be completed in December 2019.

Because the 13 aircraft were not expected when contract negotiations began, no money was initially included for long lead work, according to the joint program office. The Pentagon asked for two F-35s over the planned buy in its fiscal 2016 budget submission, and Congress added 11 more aircraft in the omnibus spending bill — a total of 13 extra jets.

The money will go toward adding the 13 F-35s into the production schedule of the other aircraft appropriated in FY16, which are included in the 10th low-rate initial production lot, according to the JPO.

Lockheed is still waiting to finalize negotiations for the ninth and 10th batches of F-35s, valued at about $16 billion total. JPO Chief Lt. Gen. Christopher Bogdan told reporters recently that he expected to finalize the ninth low-rate initial production contract with Lockheed by the end of March, with the 10th following a few months later. But negotiations on both are still ongoing."

Source: http://www.defensenews.com/story/defens ... /83864126/

[optimist]

I'll put it here, Bogdan talking about the proposed 3 year block buy, after the gov hearing
https://soundcloud.com/pogo-620924182/g ... -interview

[gabriele]

Article says LRIP 10 extra although first paragraph says 'eleven' (perhaps that is the volume? ) Anyhoo news is news.

Lockheed Martin Gets $1.3 Billion For F-35 Plus-Ups
03 May 2016 Lara Seligman

"WASHINGTON — The Pentagon has awarded Lockheed Martin a $1.3 billion contract for advance work on 13 F-35s added to an 11th batch of joint strike fighters during budget negotiations last year, according to the program office.

The contract includes six Marine Corps F-35Bs, three Air Force F-35As and four Navy F-35Cs, according to an announcement Monday. Work will be completed in December 2019.

Because the 13 aircraft were not expected when contract negotiations began, no money was initially included for long lead work, according to the joint program office. The Pentagon asked for two F-35s over the planned buy in its fiscal 2016 budget submission, and Congress added 11 more aircraft in the omnibus spending bill — a total of 13 extra jets.

The money will go toward adding the 13 F-35s into the production schedule of the other aircraft appropriated in FY16, which are included in the 10th low-rate initial production lot, according to the JPO.

Lockheed is still waiting to finalize negotiations for the ninth and 10th batches of F-35s, valued at about $16 billion total. JPO Chief Lt. Gen. Christopher Bogdan told reporters recently that he expected to finalize the ninth low-rate initial production contract with Lockheed by the end of March, with the 10th following a few months later. But negotiations on both are still ongoing."

Source: http://www.defensenews.com/story/defens ... /83864126/

The Pentagon says the 13 jets are added to LRIP 11, so article is correct, unless there is a typo in the DoD release itself: http://www.defense.gov/News/Contracts/C ... cle/747606

The previous Long Lead order for LRIP 11 included only 28 A, 6 B and 4 C for the US forces, so it looks like they are ordering the LRIP 11 in tranches. Authorization issues, i suppose...?
We will see more announcements like this, too, since the LRIP 11 expectations (43 A, 16 B, 4 C) are still far away: while the C total is increased, the B "on order" are now 12 rather than 16, and 31 A rather than 43.
So, more to follow.

[spazsinbad]

F-35 Block 3F test schedule slips as Lot 9-10 contracting drags on
25 May 2016 James Drew

"The Pentagon appears to be no closer to reaching an agreement with Lockheed Martin on contracts for the production of 151 F-35 Lightning II aircraft as part of low-rate production lots nine and 10.

The F-35 Joint Programme Office (JPO) and the aircraft manufacturer have been trying to come to an agreement on pricing for the 57 total aircraft in Lot 9 and the 94 jets in Lot 10 since wrapping up an agreement for Lot 8 for 43 aircraft in October 2014.

Without giving any reason for the dragged-out negotiation process, Pentagon acquisition chief Frank Kendall confirmed during a press briefing on 24 May that no agreement has been reached for those aircraft quantities funded in fiscal years 2015 and 2016. This is despite Lockheed already receiving funding for long-lead parts needed for the on-time production of Lot 11 aircraft (FY2017).

“We haven’t reached an agreement,” Kendall says. “We’re working hard to get the best possible value for the taxpayer and one that we think is fair to the contractors and we’re not in agreement yet. We’re negotiating [Lots 9-10] together.”...

...Regarding a potential “block buy” of aircraft by the international programme partners, Kendall says most of the partners remain fully committed to that joint purchasing concept, but the Pentagon still isn’t planning to join until one year later. The JPO is said to be fully supporting those discussions between Lockheed and the programme partners and foreign military sales customers.

“We’d like to join that as soon as we can," says Kendall. “We’re not discouraging our partners from starting that and we’re working with industry, and we’ll cooperate with them in that endeavour and try to set it up and join as soon as we’re able to under US law.”"

Source: https://www.flightglobal.com/news/artic ... ra-425713/

[gideonic]

With LRIP9/10 contracts still dragging on, what might this mean?
http://www.star-telegram.com/news/busin ... 29657.html

In a proposal made to Lockheed last week, union leaders asked for a longer contract — from July 2016 to April 2021 — that increases pay 38 percent. The machinists also want $7,500 in cost-of-living adjustments and a $5,000 signing bonus, among other things.

The plant is scheduled to build about 50 airplanes this year, with production expected to almost double by 2018. By the end of the decade, it hopes to produce up to 17 stealth fighters a month. Lockheed plans to hire up to 1,000 additional assembly line workers.

If the union walks ot for 6 weeks (like they did in 2012) and/or gets what the want ... either way it looks to have a major effect :S

[spazsinbad]

F-35 Unit Cost To Go Below $100 Million, Maker Says
07 Jul 2016 Chris Pocock

"Negotiations to finalize the contract for the next 160 F-35 Lightning II airframes are still not concluded, although a deal concluding the supply of their F135 engines was announced by the F-35 Joint Program Office (JPO) today. However, Lockheed Martin (LM) F-35 program general manager Jeff Babione told reporters attending a briefing at the Royal International Air Tattoo (RIAT) in the UK that the unit recurring flyaway cost (URFC) of the F-35A version is now heading below $100 million.

This will be the price paid by U.S. and international customers for jets delivered within Low Rate Initial Production (LRIP) Lot 10, he said. That lot is being negotiated together with LRIP Lot 9, a process that is taking much longer than predicted. Explaining the delay, Babione said that estimating the cost of building aircraft in two years’ time is complicated, and that there had also been “some changes along the way.” Lockheed Martin has been funding long-lead items for the aircraft itself; “We’re building them anyway,” he said.

The affordability of the F-35 has exercised budget planners in the Pentagon and caused some international customers (such as Denmark, Italy and the Netherlands) to significantly reduce their total planned buy. Babione said that LM’s target URFC for an F-35A produced in 2019 was $85 million, $5 million more than the previous predictions for full-rate production. There are no specific targets for the F-35B STOVL and F-35C carrier versions, he added. They are considerably more expensive.

According to Babione, the possibility of block buys to assure lower unit costs still exists. Advice from the Pentagon’s own weapons tester against concluding such a contract seems to have postponed any prospect of the U.S. services committing to this before Lot 13. However, the JPO was discussing a “hybrid block buy” from Lot 12 with some of the international partners, the LM manager said. Almost half of the F-35s planned to be built over the next five years are international, he noted...."

Source: http://www.ainonline.com/aviation-news/ ... maker-says

[bring_it_on]

Protracted F-35 Contract Talks Force Lockheed To Fork Up Cash
Aerospace Daily & Defense Report Jul 20, 2016
Lara Seligman

Protracted negotiations between the Pentagon and Lockheed Martin over the next batches of F-35s are weighing on the company’s cash flow, with Lockheed forced to use internal funding to pay suppliers that have already begun work on the lot 9 and 10 jets.
Lockheed has paid nearly $1 billion out of pocket to pay for long-lead materials for F-35 low-rate initial production lots 9 and 10, said Bruce Tanner, chief financial officer and executive vice president. As work on LRIP 9 and 10 ramps up, Lockheed anticipates spending $400-500 million a month on the program—levels Tanner said the company will not be able to sustain.

“If we don’t either get funding through a funding mechanism such as a UCA,” Tanner said during Lockheed’s second-quarter earnings call on July 19, referring to an undefinitized contractual action, “or we definitive the contracts, we will not be able to continue and have that level of cash outflow as a corporation. We simply don’t have that capacity.”

Lockheed would prefer to finalize contract negotiations rather than fund early work on lots 9 and 10 through a UCA because a contract award would include incentives for greater cash recovery, Tanner said.

“The Pentagon clearly knows that situation, and I’m optimistic that we’re going to get cash soon,” Tanner said.

F-35 Joint Program Office (JPO) spokeswoman Brandi Schiff said negotiations on lot 9 and 10 are ongoing.

“We’re working hard on getting the deal for the taxpayers so we can bring the best aircraft to the warfighter. That is our main goal,” JPO spokeswoman Brandi Schiff said. The Pentagon and Lockheed have been working to finalize contract negotiations for LRIP 9 and 10, valued at about $16 billion total, for more than six months now. JPO Chief Lt. Gen. Christopher Bogdan told reporters earlier this year that he expected to finalize lot 9 by the end of March, with lot 10 following a few months later. But negotiations on both are still ongoing, with the JPO now saying lots 9 and 10 will be announced together.

The contract announcement may be nearing, as the Defense Department recently authorized the LRIP 10 contract for an estimated 82 F-35s to move forward, according to a July 20 notice posted to the Federal Business Opportunities website. Work on lot 10 was expected to begin around November of 2014, with aircraft deliveries to the U.S., U.K., Italy, Australia, Turkey, Norway and—notably—Canada planned between January and December of 2018, according to the document.

[spazsinbad]

Pentagon Grants Lockheed About $1B To Stem F-35 Lot 9 Production Costs
12 Aug 2016 Valerie Insinna

"WASHINGTON — With F-35 contract negotiations stretching on, the US Defense Department in August approved about $1 billion in additional funding to reimburse joint strike fighter manufacturer Lockheed Martin for costs incurred on the ninth batch of aircraft, sources with knowledge of the program said Thursday.

The move provides some financial relief to the company, which had been paying out of pocket for expenses associated with low-rate initial production (LRIP) lots 9 and 10. Last month, Lockheed’s chief financial officer, Bruce Tanner, said the company had spent nearly $1 billion of its own funds to compensate suppliers.

While the F-35 program executive office declined to confirm how much money had been obligated to the company, joint program office (JPO) spokesman Joe DellaVedova told Defense News that “with what we have provided, Lockheed will be able to continue the LRIP 9 production without bearing any undue burden.”

The JPO obligated the funding through an already existing undefinitized contract action (UCA) for the ninth batch of LRIP aircraft. It is now negotiating with Lockheed on a separate UCA that would provide some cash for LRIP 10 if a final contract is not agreed to by then, DellaVedova said.

“We appreciate the actions taken by the JPO to ensure delivery of F35s to our warfighter customer,” Lockheed spokesman Mark Johnson said in an email....

...DellaVedova stressed that the JPO did not obligate additional LRIP 9 funding in response to Tanner’s statements. The office started the process to increase the value of the UCA in June, he said.

“The F-35 joint program office manages the program. We know the cost. We know the technical issues with the program,” he said. “And working with industry partners, we know what it takes to deliver aircraft. So we knew that additional funds would be needed to cover the work for the LRIP 9 jets and so we took action to provide funds so there was no undue burden upon the company.”

Asked whether the UCA funding signified that LRIP 9 and 10 negotiations will continue to drag on, DellaVedova demurred.

“We want to ensure the continued production of F-35s while we continue to negotiate a fair deal,” he said.

The JPO initially predicted it would have a final contract in hand early this year."

Source: http://www.defensenews.com/story/breaki ... /88600730/