Government Negotiating New ‘Skinny’ F-35 Sustainment Deal

Discuss the F-35 Lightning II
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doge

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Unread post25 Feb 2021, 16:28

Other articles. 8)
There are a lot of similar articles!! :doh: :bang: :bang: :bang:

airforcemag
https://www.airforcemag.com/steady-f-35 ... at-an-end/
Steady F-35 Price Reductions Likely at an End
Feb. 19, 2021 | By John A. Tirpak
The next three lots of F-35 production—now being negotiated—likely won’t see much, if any, lowering of unit prices, Lockheed Martin aeronautics vice president Gregory M. Ulmer said Feb. 19.
A reduction in units being procured and an increase in capability of the aircraft will make it tough to keep the price from rising, he said.
“If you look at the next three lots, there’s going to be quite a bit of pressure, I would say, keeping the cost neutral,” Ulmer told journalists on a telecon press conference ahead of AFA’s virtual Aerospace Warfare Symposium Feb. 24-26.
There’s “a significant quantity reduction in the next three years … on the order of 100 aircraft,” he said, so there will be fewer aircraft across which to spread overhead costs.
In the Lot 12, 13, and 14 deal, announced in October 2019, there were 478 aircraft, and Lockheed’s unit price for the F-35A model fell below $80 million apiece for the first time. The Lot 12-14 contract reduced F-35 unit prices nearly 13 percent over the previous lots, and marked the sixth successive year of unit price reductions.
“We also know we’re going to put Tech Refresh 3 [upgraded software, improved core processor, new cockpit display] and new capabilities on the aircraft” in Lots 15-17, Ulmer said. Given all that, “We’re working to keep a cost-neutral position” for the next production lots.
The Joint Program Office reported in January that its contracting strategy for Lots 15-17 will be to negotiate a “base year” contract for Lot 15, with two single-year options in Lots 16 and 17.
The F-35 still has not been declared ready for full-rate production; that status has been repeatedly delayed while the Pentagon integrates the aircraft with the Joint Simulation Environment, a Pentagon wargaming system that assesses the right numbers of various platforms for various combat scenarios.

Declaring the F-35 ready for full-rate production will make it possible for a multi-year contract of five to seven years, Ulmer said, noting that partners are already taking advantage of block buy quantities to reduce risk. That arrangement would enable contractors and subs to make better deals for materials and labor, which could hold prices down, he said.
Asked if declaration of full-rate production readiness would enhance the image of the F-35 worldwide, Ulmer said, “From my view, it’s already …happened,” citing the success of the F-35 in real-world combat operations in the U.S. Central Command area of operations, and the fact that the program has ramped up production steadily and “met all our commitments.” He noted, though, that the COVID-19 pandemic affected the ramp rate, and previously acknowledged that Lockheed fell 20 airplanes short of its planned deliveries in 2020.
Turkey’s removal from the F-35 program won’t affect foreign sales prospects. The U.S. Air Force will buy the aircraft built in production line positions previously held by Turkey, said Ulmer.
The Turkish slots “are spoken for,” Ulmer said. “At the time we stepped away from Turkey, there were eight aircraft” completed for that country. “Those have all been … delivered to the U.S Air Force.” There were also three lots of eight aircraft for Turkey “in flow,” and “all those will be [delivered] to the U.S. Air Force as well. There is no plan to allocate those to a different customer,” Ulmer reported.
There are numerous potential F-35 customers in the Middle East and Far East, Ulmer said, declining to be specific.
Ulmer said Lockheed is awaiting a request for proposals in the spring from the F-35 Joint Program Office on a Performance-Based Logistics plan the company pitched to the Pentagon two years ago. The plan would see Lockheed invest more than a billion dollars up-front in sustainment enhancements, and the government would pay the company back out of its operating savings. Lockheed said at the outset the PBL plan is the only way to achieve a cost per flying hour of $25,000 by 2025, and Ulmer said that goal is “still doable.”
He also said Lockheed has a backlog of 128 F-16s to be produced at its new Greenville, S.C., F-16 production facility for five customer countries, and there is a potential to sell as many as 300 more, although some of the customers will be “repeat” buyers. That figure doesn’t include India, which may build an advanced F-16, called the F-21, under license. New customers include Bulgaria and Slovakia, Ulmer said.

Asked to comment on Air Force Chief of Staff Gen. Charles Q. Brown’s announcement of a new tactical aircraft study, Ulmer said he agrees with Brown’s “approach, relative to the operational analysis and the study aspect” but believes it should take a holistic view of air combat.
“I tend to think it’s a system of systems, and not so much a platform-centric solution set,” he said. As to Brown’s suggestion that the Air Force may need a generation 4-plus or 5-minus platform to succeed the F-16, Ulmer said “if you fast-forward to the next decade, I think the ‘low end’ fight in the future is very much a ‘high-end’ fight. If you look at the proliferation of [Russian air defense] S-300 or S-400 [systems] … it’s going to be even more so in the future.”

flightglobal
https://www.flightglobal.com/fixed-wing ... 77.article
Lockheed Martin confident F-35 operating cost will be reduced to $25,000 per hour
Garrett rhymeBy Garrett Reim 24 February 2021
Lockheed Martin is confident the F-35 stealth fighter’s operating cost will be cut to $25,000 per hour by 2025 if the Joint Program Office that manages the aircraft agrees to a performance-based logistics contract.
The company is under pressure to deliver improvements to the aircraft’s reliability and operating costs as the jet’s leading customer, the US Air Force, considers cheaper alternatives, such as the Lockheed F-16 fighter or a clean-sheet 4.5th-generation combat aircraft.
Greg Ulmer, the company’s executive vice-president of aeronautics, said on 19 February that the company is anticipating a request for proposal for a performance-based logistics contract from the Joint Program Office this coming spring. Lockheed believes it will receive a sole source justification as the only company qualified to maintain the F-35.
Lockheed says it is developing a performance work statement and draft contract structure in coordination with the Joint Program Office.

The Joint Program Office and the Department of Defense have previously expressed scepticism that Lockheed could reduce the F-35’s cost to $25,000 per hour by 2025 – the company’s goal. However, the company points to its track record in reducing the operating costs of the jet in recent years.
“Over the last five years, we’ve reduced the operating costs by 40%,” says Ken Merchant, Lockheed’s F-35 sustainment vice-president. “We’re predicting that we can take another 40% out of that Lockheed-controlled cost, which is about 39% of the cost per flying hour.”
In theory, a multi-year performance-based logistics contract would allow Lockheed to take ownership and control of the whole maintenance and sustainment process of the F-35. That is, opposed to a more conventional maintenance contract which tends to cause customers to order parts and services in disconnected, one-off transactions.
A multi-year performance-based logistics commitment could allow the manufacturer to take advantage of economies of scale savings by purchasing bulk parts and services upfront at lower prices from suppliers. It might also create cheaper and more effective sustainment processes. Some savings would be passed on to military operators of the F-35, while Lockheed would keep the rest as profit.

Lockheed emphasises that the performance-based logistics contract is more than a theory. The company is preparing to execute on such a maintenance arrangement and has implemented similar contracts with its suppliers.
“We believe we’re making the right movements; that we’ve made the right upfront investments in decision support tools and decision analytics, that are helping us make the right calls and move parts to the right places. And, it’s driving those cost savings,” says Merchant. “We also need the government to make similar commitments and savings on their side of the equation as they’ve got 49% of the cost per flying hour on the jet. Many of the things we’re doing will impact those positively on their side of the equation. And so that’s what gives us the confidence that we can get to that [$25,000] by ’25.”
Pratt & Whitney, maker of the F-35’s F135 jet turbine, is responsible for the remainder of the combat aircraft’s operating costs.
Lockheed says the current operating cost of the F-35 is about $36,000 per flight hour. The company believes it can reduce its share of that cost by another 40% by 2025.

https://www.flightglobal.com/fixed-wing ... 01.article
Lockheed Martin defends value of F-35 as USAF programme under new pressure
Garrett rhymeBy Garrett Reim 20 February 2021
Lockheed Martin is defending the value of the F-35 stealth fighter as the US Air Force (USAF) is for the second time in two years considering buying a cheaper fourth-generation fighter for its fleet recapitalisation plans.
Instead of exclusively buying the F-35, as had long been its plan, the service is studying a future fighter fleet that might include new-build Lockheed F-16s or possibly a clean-sheet 4.5th-generation fighter, said USAF chief of staff General Charles Brown on 17 February. The USAF first strayed from its stealth aircraft buying plan in 2020 when it started buying the Boeing F-15EX to replace the F-15C. The F-35’s high-operating costs were one reason it was forgone.

The cost of operating the USAF’s F-35A has been cited as high as $44,000 per hour, according to the Department of Defense. The Pentagon’s Cost Assessment and Program Evaluation Office and the F-35 Joint Program Office previously have express scepticism that the F-35A’s operating costs could be reduced to $25,000 per hour by 2025, which is Lockheed’s goal.
Nonetheless, in response to Brown’s comments Greg Ulmer, executive vice-president of Lockheed Martin’s Aeronautics business area, told reporters on 19 February that the company was still committed to and confident of reducing the cost of flying the F-35 to $25,000 per hour.

“We’re very focused on reducing sustainment costs for the F-35. The last five years alone, we’ve been able to reduce about 40% of the Lockheed Martin element of sustaining cost in terms of cost per flying hour,” says Ulmer. “We predict similar 40 to 50% reduction in the next five years. We feel that the F-35 is very strongly positioned relative to the future for the United States Air Force.”
Brown said the USAF was examining buying new-build F-16s or a clean-sheet 4.5-generation fighter to handle lower-end threats. Ulmer pushed back on that idea.

“If you look at what the low-end threat that was alluded to, that may drive a thought of lesser platforms,” he says. “[However] I think if you fast forward to the next decade, the low-end fight in the future is very much a high-end fight. So, if you look at the proliferation, for example, of S-300 or S-400, or other aspects of things today, it’s going to be even more so in the future.”
The Russian-built Almaz-Antey S-300 and S-400 surface-to-air missile batteries are often cited as the premier threats to US combat aircraft. For its part, Russian export agency Rosoboronexport has advertised the S-400 as having an “anti-stealth range” of up to 81nm (150km). The S-400 is fielded by Russia, China, Belarus and Turkey. India also has ordered the weapon, but has yet to receive it.

Ulmer also went on to boost the F-35 as a “system of systems”, a reference to the aircraft’s computer processing and communications abilities.
The F-35 has been compared to a sports car: highly capable, but finicky and expensive to maintain. Lockheed has struggled to reduce the stealth jet’s number of identified problems, cutting the number of deficiencies in 2020 by just two, with 871 issues remaining.

The USAF had originally planned to acquire 1,763 F-35As. It has not said that programme of record has been formally reduced. However, each time it buys fourth-generation fighters instead of the F-35 that seems to be implied.
The US Marine Corps also appeared to have reduced its appetite for the short take-off and vertical landing F-35B and carrier-variant F-35C when it revealed plans to reduce squadron sizes in 2020. The service seemed to imply it would cut its plan to buy 420 examples of the F-35 (353 F-35Bs and 67 F35Cs) by 2031 by 120 to 130 aircraft.

insidedefense
https://insidedefense.com/insider/lockh ... rfp-spring
Lockheed expects sustainment RFP this spring
By Courtney Albon / February 19, 2021
A Lockheed Martin official said today the company expects the Air Force to issue a request for proposals this spring for an F-35 performance-based logistics sustainment contract.
Greg Ulmer, who recently transitioned from his role as Lockheed's F-35 program lead to executive vice president for the company's aeronautics business, told reporters today the company continues to work with the Defense Department on a possible PBL construct, which officials have said is key to reducing long-term sustainment costs.
"In our sustainment business, we are currently delivering F-35s that are below the cost of less-capable fourth-generation aircraft while also lowering Lockheed Martin's portion of sustainment . . . by 40% over the last five years, and we expect to reduce another 50% over the next five," Ulmer said.

Lockheed announced in 2019 that it had pitched a plan to the Pentagon for a five-year PBL that it says could save $1 billion and help achieve the program's target to reduce the F-35's cost-per-flying-hour to $25,000 by 2025. In early January, DOD awarded the company a $1.28 billion undefinitized contract action for sustainment work that extends through June.
Ulmer said today the company is seeing progress on sustainment costs and believes the $25,000 CPFH goal is still "doable."
As for production efficiency and air system affordability, Ulmer said there's pressure in the current negotiations for low-rate initial production lots 15, 16 and 17 to keep costs down. He noted that the three-year block buy includes about 100 fewer aircraft than the previous three lots combined and will incorporate a key technology refresh, TR3.

"We're working to keep a cost-neutral position for the cost of the F-35 production system," he said.
The company is also awaiting Pentagon approval of a full-rate production decision that was originally expected in December of 2019 and likely won't occur until later this year due to initial operational test and evaluation delays. Asked whether the FRP delay has a tangible negative impact on the company, Ulmer said the wait hasn't been detrimental to Lockheed but it has stalled the program's transition to longer-term, multiyear contracts.
"The benefit from a full-rate production decision would be our ability to go to a longer period of performance -- think five-year, maybe seven-year . . . which will then allow industry to make a bigger investment or get a bigger economic order quantity value," he said.
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doge

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Unread post25 Feb 2021, 16:34

In my case, I would keep an eye on the annual quantity of F-35s. 8) (My thoughts.)
As an annual tendency.
    U.S.|request |enacted |
    FY13 | 29 | 29 |
    FY14 | 29 | 29 |
    FY15 | 34 | 38 |
    FY16 | 57 | 68 |
    FY17 | 63 | 74 |
    FY18 | 70 | 90 |
    FY19 | 77 | 93 |
    FY20 | 78 | 98 |
    FY21 | 79 | 93 (+Turkey 6 =99?)|
Contrary to USAF, USMC, USN and Web News/reporter who criticize the F-35 and claiming on cuts, I see Procurement Budget.
That is the actual situation and truth.

Even in the future, if the gap difference between [request] and [enacted] is wide and [enacted] is superior, I think the F-35 is safe secure.
But, when the difference closes or reverses, it is dangerous.

Therefore, I would like to pay attention to the number of F-35s in 2022. What will happen this year-next year? (Two choices: maintaining the current pace, or pace change.)
Judging from the trend, there is no indication that [enacted] will fall below [request].
Even if the USAF, USMC, USN want to reduce the number of F-35s, [enacted] can prevents them from doing so. :devil:

Or is it more than a decade away that the F-35 cuts they are talking about will begin? :roll: (My perspective is short-term. :doh: )
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Unread post21 Apr 2021, 15:43

Sustainment Becoming Most Profitable Part of F-35 for Lockheed Martin
20 Apr 2021 John A. Tirpak

"...The House Armed Services Committee is holding an F-35 hearing on April 22, with testimony to be offered by Gregory M. Ulmer, Lockheed aeronautics vice president and former F-35 program manager; Pratt & Whitney President of Military Engines Matthew F. Bromberg; Diana Maurer of the Government Accountability Office; F-35 Joint Program Office Director Lt. Gen. Eric T. Fick, and Air Force F-35 Integration Office Director Brig. Gen. David W. Abba.

Despite increased profitability, Possenriede [Lockheed CFO Kenneth R. Possenriede] said the sustainment model for the F-35 is “inefficient,” and he touted the company’s offer of a performance-based logistics contract as the best way to get sustainment costs down. The PBL pitch includes Lockheed and its vendors investing some of their own money in economic order quantities of parts and materials to reduce costs, and going to five-year contracts rather than annual ones....

...As for sustainment, he [James D. Taiclet, Lockheed president and CEO] said a “joint strategy” is needed with the program office and the services; “those who will actually have to fix this aircraft and maintain it in the field.” They need to seek “the right level of funding for spare parts, etc., and really, clearly define responsibilities for the depot system, for frontline maintenance, and for the OEM and our supply chain.”

All this is, “I think, a very doable thing,” Taiclet said, “And we’re embarking on that, led by the Joint Program Office and the service Chiefs.” The program goal of getting operating costs down to $25,000 per flying hour in 2012 dollars—versus $35,000 now—“if we work with them, is achievable.”..."

Source: https://www.airforcemag.com/sustainment ... ed-martin/
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Unread post23 Apr 2021, 02:40

Looks & sounds like Congress won't be funding additional F-35s beyond what's going to be requested for FY 22. We'll know how many ~end May.
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Unread post23 Apr 2021, 05:31

Is the F-35 in a pinch ? :roll: (Have I been too optimistic ? :doh: )
https://www.airforcemag.com/hasc-leader ... 22-budget/
HASC Won’t Plus Up F-35 Request in Fiscal 2022 Budget
April 22, 2021 | By John A. Tirpak

https://breakingdefense.com/2021/04/has ... -for-f-35/
HASC Dems Put DoD On Notice: No Free Pass For F-35
“If this program continues to fail ... we may need to invest in other more affordable programs, and backfill an operational shortfall of potentially over 800 tactical fighters,” said Rep. Donald Norcross, chair of the HASC tactical air and land forces subcommittee.
By THERESA HITCHENS on April 22, 2021

https://www.defensenews.com/air/2021/04 ... -lockheed/
‘Don’t expect more money’ for additional F-35s in FY22, lawmakers tell an embattled Lockheed
By: Valerie Insinna

https://news.usni.org/2021/04/22/hasc-c ... ustainment
HASC: Congress Let DoD Buy Too Many F-35 Fighters But Not Enough F-35 Spares, Sustainment
By: Megan Eckstein April 22, 2021

https://www.stripes.com/news/us/lawmake ... s-1.670830
Lawmakers vow to slow F-35 production amid mounting cost overruns, low mission-capable rates
By COREY DICKSTEIN | STARS AND STRIPES Published: April 22, 2021

There are so many articles with the same content! :bang:
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Unread post23 Apr 2021, 11:04

The problem could “result in a 47 percent reduction in the Air Force planned inventory goal of 1,763 aircraft, just to remain in their budget,” Norcross said.

If the program “continues to fail to significantly control and reduce” sustainment costs, “we may need to invest in other, more affordable programs, and backfill an operational shortfall of potentially over 800 fighters.” Norcross noted that “we don’t have unlimited resources” and that he “would not support any request for additional aircraft beyond what is contained in this year’s President’s Budget request.”


Ok, F-35 currently costs about 33,000 US$ an hour to fly. 47 percent reduction need in inventory means that F-35 flight hour should get down to about 17,500 US$ to stay within sustainment budget... I think either budgeting is seriously messed up or this is just political play. I can see that too many F-35s now is troublesome when there is still large number of legacy fighters that need to be sustained. However this situation looks like really bad planning and/or communication breakdown between US military and politicians.
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Unread post23 Apr 2021, 14:25

“we don’t have unlimited resources”

Translation: We do have unlimited resources, we just don't want to spend more money on this program (cuz our benefactors / backers don't want us to anymore).
“we may need to invest in other, more affordable programs"

Translation: so let's go spend more ungodly amounts of money on vaporware / programs that do not yet exist.
Take an F-16, stir in A-7, dollop of F-117, gob of F-22, dash of F/A-18, sprinkle with AV-8B, stir well + bake. Whaddya get? F-35.
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Unread post24 Apr 2021, 09:32

I can see that too many F-35s now is troublesome when there is still large number of legacy fighters that need to be sustained.


Just call them old fighters, it's much more accurate and honest than the contorted 'legacy-fighter' balderdash. :P

Old fighters* are a bad habit which the old-guard in Congress can't bring themselves to divest from, to allow more efficient and rationalized operation.

Fortunately China and Russia are even a bit worse at doing that, but there's not a lot in it.

* No offence to old fighter pilots though.
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Unread post24 Apr 2021, 19:50

Salute!

Thanks, Element, some of us are very old. I prefer "classic" versus "antique" or even "legacy". Well..... I can handle "legacy", heh heh.

I agree we should call the old planes "old". Fer chrissakes , the P-51 's are legacy, and the F-86's . Even the Huns and 6's and Thuds. But the Eagles and Vipers and Hawgs are just plain "old".

Due to my timing and assignments, I got to know and fly with two USAF CSAF, and both Guard and Reserve chiefs. Fogleman told me that he knew Congress and the Eagle Mafia were gonna kill the Raptor. He figured about 300 or so Raptors, then at the end he said maybe 250 or so. This was mid to late 90's.

I cannot see the "ticks" cutting off the F-35 soon, but they will likely spend a few billion each year on studies and "clean sheet design" junkola versus the greater billions for F-35 procurment and operations. Maybe buy a buncha Super Hornets from Pattie's district, huh?

My days are limited, but I predict a big cut in F-35 procurement in about 3 or 4 years.

Gums sends...

P.S. I was honored to check out some Guard units that were still flying the F-86!!! This was 1971. And that thing was an honest legacy plane. They were a bunch of pissed off country club types when they had to check out in the A-37! The Green Mountain Boys and Baltimore and Syracuse outfits, best I recall. They literally had flying clubs.
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Unread post24 Apr 2021, 20:16

@Gums... It is going to be very hard to kill the F-35 for several reasons.

1) The lead time on getting a new fighter to IOC is at least 20 years.
2) The F-35 is a Joint program with many other nations and will be the backbone of NATO.
3) The pentagon can create derivatives of the F-35 and if need be give it a new name and designation to confound the politicans and the bean counters.
4) The new propulsion systems, radically improved sensors, and weapons systems to justify build sixth genration fighters are not ready yet.
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Unread post24 Apr 2021, 20:21

:roll: The Oz F-86 SABRE inspired me to get airborne 60 odd years ago now, now this would be the CLUB I would join. :devil:
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Unread post24 Apr 2021, 20:59

Salute!

Alloy! Attention!

The new guys do not think about ten or fifteen years to design and develop and field a new system. They think they can save the planet if we revert to caves and fires from trees to heat the veggies we scarf from the forest.

OTOH, your point about the other nations buying the plane is exactly right. LM will do just fine and create many good jobs here in the USA. The US defense establishment might be a different story.

Gums sends,,,
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Unread post27 Apr 2021, 00:39

“More Organic Maintenance...”

https://breakingdefense.com/2021/04/dod ... -lockheed/

Just thinking out loud here, but if — as LM claims in the most recent Congressional hearing in the program — they have reduced costs in their portion of the sustainment pie by 44% (see Ulmer SFTR), how is it that sustainment costs have risen and exactly where/what are those increases attributable to?
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Unread post27 Apr 2021, 01:26

F-35 Sustainment Strategy Coming This Summer
April 26, 2021 | By John A. Tirpak

The F-35 Joint Program Office will deliver a sustainment strategy for the Joint Strike Fighter this summer, with a sequenced plan that moves toward achieving—but probably doesn’t reach—a cost per flying hour of $25,000 by 2025, Program Executive Officer Lt. Gen. Eric T. Fick told Congress on April 22.

“We are … executing the business case assessment to determine what our long-term sustainment strategy needs to be for the enterprise,” Fick told the House Armed Services Committee. This strategy will be “released this summer” and it will determine whether the F-35 will be supported by a contractor Performance-Based Logistics deal, “more organic” support, or “something different,” he said

Lockheed Martin has reported that it expects a request for proposals on a Performance-Based Logistics contract this summer, and the JPO has whittled it down from its initial scope. Ken Merchant, Lockheed’s vice president of F-35 sustainment, in February called the likely deal a “skinny” PBL.

The JPO didn’t endorse the PBL concept as proposed because, “We didn’t want to get trapped into a mandate to sign a PBL contract that’s a bad deal before we’re ready,” Fick explained to the HASC panels. He said the JPO has been studying the PBL since Lockheed “dropped” the white paper proposing it “on Ellen Lord’s desk” 19 months ago. Ellen Lord was the Pentagon’s acquisition and sustainment czar in the Trump administration; her replacement has not yet been named...........

https://www.airforcemag.com/f-35-sustai ... E.facebook
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Unread post27 Apr 2021, 01:33

Rather than 'faceLOOK' which is unavailable for some WWW is: https://www.airforcemag.com/f-35-sustai ... is-summer/

ASLO (yes I know) from above:
"...Ulmer also reported that his understanding is that the Air Force only plans to retrofit aircraft from Lot 11 and beyond to the Block 4 configuration, which will require modifications and an update to the Tech Refresh 3 standard, which includes new processors, electronic warfare, and a large cockpit display."

"...“Demand reduction” translates to higher-quality parts that break less often, but Air Force F-35 Integration Office Director Brig. Gen. David W. Abba told the committee the “break rate” of aircraft is only four percent per sortie. Newer aircraft are far more reliable and have much better mission capable rates than early-manufacture aircraft.

Fick also noted that the JPO is working with the services to determine if another layer of sustainment between the flight line and the depot is needed, noting the Navy having achieved success in accelerating parts repair using this “intermediate” support level. As a cost-saving measure, intermediate level maintenance was dropped early in the program [oh the irony]...."
A4G Skyhawk: www.faaaa.asn.au/spazsinbad-a4g/ & www.youtube.com/channel/UCwqC_s6gcCVvG7NOge3qfAQ/videos?view_as=subscriber
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