F-35 program updates

https://www.reuters.com/article/us-lockheed-f35-exclusive/exclusive-pentagon-stops-accepting-f-35-jets-from-lockheed-over-repair-cost-dispute-idUSKBN1HI304

Welcome to "Cutting off your nose to spite your face."

Iirc, flight test flight hours are north of 16k; the reporters mistook the ‘flights’ for ‘flight hours.’

https://www.reuters.com/article/us-lockheed-f35-exclusive/exclusive-pentagon-stops-accepting-f-35-jets-from-lockheed-over-repair-cost-dispute-idUSKBN1HI304

Welcome to "Cutting off your nose to spite your face."

Not really, this is quite a smart move imho from a finance perspective. Contractors often get paid only when they deliver. The non-acceptance actually is a significant cash-flow cost to LM if they are sitting on inventory without getting paid and that can only grow if nothing is done. The jets probably is worth more to LM than the repair cost so it brings this issue to a higher level of scrutiny within LM.

The program managers on both sides are savvy enough not to let this escalate but LM will have to put in the resources and attention to get this resolved which is what the USAF is counting on. The USAF must have felt LM wasn't putting enough attention on this issue.

https://www.reuters.com/article/us-lockheed-f35-exclusive/exclusive-pentagon-stops-accepting-f-35-jets-from-lockheed-over-repair-cost-dispute-idUSKBN1HI304

Welcome to "Cutting off your nose to spite your face."

Not really, this is quite a smart move imho from a finance perspective. Contractors often get paid only when they deliver. The non-acceptance actually is a significant cash-flow cost to LM if they are sitting on inventory without getting paid and that can only grow if nothing is done. The jets probably is worth more to LM than the repair cost so it brings this issue to a higher level of scrutiny within LM.

The program managers on both sides are savvy enough not to let this escalate but LM will have to put in the resources and attention to get this resolved which is what the USAF is counting on. The USAF must have felt LM wasn't putting enough attention on this issue.

Performance-based payments don't really work in this manner. Most of the major payment-events have occurred prior
to delivery. Often, it's just the final incentives/fees/award determinations that are left.

It was already a resolved issue. Do you have any evidence this was done at the Air Force's instigation?
Especially with their strike fighter shortfall (which the corrosion issue does not impact), delaying
delivery of new jets that are not the least-bit impacted is silly.

Slightly different info here below compared to REUTERS (taking the DARK SIDE) "...so far at least two foreign governments have stopped accepting F-35s as a result of this issue..."

Defense Department halts F-35 deliveries amid repair bill disagreement with Lockheed
11 Apr 2018 Valerie Insinna

"WASHINGTON — The Pentagon has suspended acceptance of most F-35 deliveries as manufacturer Lockheed Martin and the F-35 program office debate who should be responsible for fixing jets after a production issue last year....

...a dispute over who should pay for the fix resurfaced and the Defense Department opted to take another production pause, a source said, declining to comment on how long deliveries have been suspended. Production of the aircraft is ongoing at Lockheed’s line in Fort Worth, Texas, and at final assembly and check out facilities in Nagoya, Japan, and Cameri, Italy. A source noted that some customers have accepted planes due to warfighter demands.

According to Reuters, two aircraft have been delivered to the Defense Department since it imposed the suspension. Meanwhile, a repair bill for more than 200 jets is on the line. The corrosion issue is just one of several production problems that has plagued the F-35 over the last couple years. [ahh the emotional dreaded PLAQUE is back]

A spokesman for the F-35 Joint Program Office didn’t immediately respond for comment...."

Source: https://www.defensenews.com/breaking-ne ... -lockheed/

Performance-based payments don't really work in this manner. Most of the major payment-events have occurred prior
to delivery. Often, it's just the final incentives/fees/award determinations that are left.

If you're suggesting F-35 progress payments are made upfront and minimal at delivery, then the F-35 program office has screwed up much bigger than published since the basic principle of procurement is always never pay in full until delivery and even then retain some, which is evidently unlikely imho.

It was already a resolved issue. Do you have any evidence this was done at the Air Force's instigation? Especially with their strike fighter shortfall (which the corrosion issue does not impact), delaying
delivery of new jets that are not the least-bit impacted is silly.

When reuters mentions: Pentagon stops accepting Lockheed F-35 jets ... I wonder who that Pentagon actually refers to....

Like I said, it may seem silly to you but it certainly won't be taken lightly by LM. I'm sure if this drags, it won't be just the USAF halting deliveries.

Progress payments can be up to 75% of the total contract value; performance-based payments can
be up to 90% of the total contract value.

The basic principle of the procurement is that the acquisition workforce and the program managers have
to *think* about the best way to meet the warfighter's' validated needs. This action is silly in that regard.

Lockheed said it was JPO. My stated view is that I find negotiating through the press or actions of this
kind distasteful and counter-productive.

The Navy does a lot wrong but my hope was that Winter would bring some of the Navy's
cordial and cooperative (if sometimes too cozy) approach to dealing with contractors with him...

On previous page this thread there is a photo of a bombed up F35C without DETAILS about the loadout 'over sand' whilst this one for a similar but different article has the details when 'over sea'. Over Sea & Sand is the motto of A4G VF-805.

https://news.usni.org/2018/04/11/32808

Photo: "Billie Flynn, F-35 Pax River ITF, conducts an external GBU-31 and AIM-9x buffet and flutter test flight from Naval Air Station Patuxent River, Maryland, on April 4, 2018, in an F-35C test aircraft. Lockheed Martin Photo"
https://news.usni.org/wp-content/upload ... 282835.jpg

Reportedly the very last SDD flight occurred today (out of Pax River).

We also have these slides from a presentation by Winter at the Sea-Air-Space Symposium (images courtesy of Stephen Trimble):

BLOS datalink for Oz version .. nice.

Progress payments can be up to 75% of the total contract value; performance-based payments can
be up to 90% of the total contract value.

The basic principle of the procurement is that the acquisition workforce and the program managers have
to *think* about the best way to meet the warfighter's' validated needs. This action is silly in that regard.

Lockheed said it was JPO. My stated view is that I find negotiating through the press or actions of this
kind distasteful and counter-productive.

The Navy does a lot wrong but my hope was that Winter would bring some of the Navy's
cordial and cooperative (if sometimes too cozy) approach to dealing with contractors with him...

We don't really know the full details of what happened on the ground that triggered this move. One thing is for sure, the cordial approach hasn't been really successful in managing taxpayer cost since day 1. LM is a profit making entity that's tasked to maximise profits for its shareholders. its not going to give in to costs just because the other party is cordial either. Having seen the words "cost overruns" repeatedly since the start, I'd give the Pentagon the benefit of the doubt before I start criticising. No one knows who leaked this to the press. Could be someone in LM, could be someone in service.

I think the JPO is transitioning to the services.

https://twitter.com/laraseligman/status ... 7061356545

Here is the JPO's statement on #F35 delivery pause (1/2): "F-35 deliveries have been temporarily paused while the government and @LockheedMartin reach an agreement on a contractual issue regarding repair work to remediate the known aircraft fastener hole primer quality escape.

(2/2): This is not a safety of flight issue but rather a contractual resourcing issue that needs to be resolved. The government has implemented this pause to ensure the warfighter receives a quality product from industry. We look forward to a swift resolution of this issue.”

Chris Bogdan = cordial.

I guess the internet service on Mars has been intermittent for a few years, eh?

F-35 Completes Most Comprehensive Flight Test Program In Aviation History
12 Apr 2018 LM PR

"NAVAL AIR STATION PATUXENT RIVER, Md., April 12, 2018 - The F-35 program has accomplished the final developmental test flight of the System Development and Demonstration (SDD) phase of the program. “Completing F-35 SDD flight test is the culmination of years of hard work and dedication from the joint government and industry team,” said Vice Adm. Mat Winter, F-35 Program Executive Officer. “Since the first flight of AA-1 in 2006, the developmental flight test program has operated for more than 11 years mishap-free, conducting more than 9,200 sorties, accumulating over 17,000 flight hours, and executing more than 65,000 test points...

...The final SDD flight occurred April 11, 2018 at Naval Air Station Patuxent River, Md., when Navy test aircraft CF-2 completed a mission to collect loads data while carrying external 2,000-pound GBU-31 Joint Direct Attack Munitions (JDAM) and AIM-9X Sidewinder heat-seeking missiles.

From flight sciences to mission systems testing, the critical work completed by F-35 test teams cleared the way for the Block 3F capability to be delivered to the operational warfighter. More than a thousand SDD flight test engineers, maintainers, pilots and support personnel took the three variants of the F-35 to their full flight envelope to test aircraft performance and flying qualities. The test team conducted 6 at-sea detachments and performed more than 1,500 vertical landing tests on the F-35B variant. The developmental flight test team completed 183 Weapon Separation Tests; 46 Weapons Delivery Accuracy tests; 33 Mission Effectiveness tests, which included numerous multi-ship missions of up to eight F-35s against advanced threats....

...Developmental flight test is a key component of the F-35 program’s SDD phase, which will formally be completed following an Operational Test and Evaluation and a Department of Defense decision to go into full-rate aircraft production.

While SDD required flight test is now complete, F-35 flight testing continues in support of phased capability improvements and modernization of the F-35 air system. This effort is part of the Joint Program Office’s Continuous Capability Development and Delivery (C2D2) framework..."

Photo: "The final SDD Test flight was piloted by F-35 Test pilot Peter Wilson, April 11, 2018. The F-35C completed a mission to collect loads data while carrying external 2,000-pound GBU-31 Joint Direct Attack Munitions (JDAM) and AIM-9X Sidewinder heat-seeking missiles. (Photo by Lockheed Martin)" https://a855196877272cb14560-2a4fa819a6 ... __main.jpg & https://www.f35.com/assets/uploads/imag ... graph2.jpg
ALSO: "The final SDD Test flight CF-2 Flt 596 was piloted by BAE Test pilot Peter Wilson, April 11, 2018, from the F-35 Pax River Integrated Test Force...." http://www.navair.navy.mil/img/uploads/ ... 7-0005.jpg (3.3Mb)

Source: https://www.f35.com/news/detail/f-35-co ... on-history

https://www.youtube.com/watch?v=oWR1KqeZBoY [YouTube Videos no longer show here in IE 11 it seems, EDGE OK]

LM is a profit making entity that's tasked to maximise profits for its shareholders. its not going to give in to costs just because the other party is cordial either. Having seen the words "cost overruns" repeatedly since the start

The majority of LRIP contracts have been mixed cost-plus incentive fee (CPIF) and fixed-price incentive fee (FPIF).

How do cost-overruns in CPIF (where the minimum fee can be zero or even negative) and FPIF maximize profits?

I've yet much if any evidence of Lockheed (or the other suppliers) engaging in selective leaking to
enhance a negotiating position. Leaks of this type almost always come from civil servants/congressional
staffers who (typically) aren't under the jurisdiction of the Uniform Code of Military Justice.