Pentagon seeks competition for sustainment of Lockheed F-35

WASHINGTON (Reuters) - The Pentagon on Friday moved toward opening the long-term operations and maintenance of its most expensive weapons program, the Lockheed Martin Corp F-35 Joint Strike Fighter, to competition from other companies.

The move is the latest action by the Pentagon to drive down the cost of the new single-engine, single-seat warplane, whose operations and maintenance costs are currently projected to reach a staggering $1.11 trillion over the coming decades.

Last week, top Pentagon and Air Force officials publicly slammed Lockheed's performance on the new radar-evading jet, whose development and production alone are slated to cost $396 billion. The officials said they were looking at ways to introduce more competition to the program.

Lockheed and the Pentagon remain locked in protracted and tense negotiations about a fifth order of F-35 production jets - talks that have been under way for over nine months.

On Friday, the Defense Department invited companies to participate in a two-day public forum on November 14-15 on possible opportunities to compete for work managing the supply chain of the new fighter jet and providing support equipment, simulators for training and a computer-based logistics system.

It said the "industry day" was aimed at identifying "potential business sources with the resources, capabilities, and experience to successfully deliver a wide range of hardware and infrastructure services in support of F-35 ... sustainment."

In a notice published on a federal website, the F-35 Joint Program Office (JPO) said it would use information from participating companies and other market research "to refine its acquisition strategy and to evaluate alternatives that will deliver the best value, long-term F-35 sustainment solution."

"This supports the broader F-35 JPO goals of increased affordability, transparency, predictability, and accountability for sustainment costs and performance," it said in the notice posted on www.fedbizopps.gov.

Current estimates for the total cost of operating and maintaining the new warplane over the next 50 years are over $1 trillion, including inflation and projected fuel costs, although officials have said they expect to lower that cost dramatically.

Lockheed said it was the prime contractor for sustainment of the new jets at the moment, and aimed to keep that role. The company said its executives would attend the Pentagon's industry day but it remained confident that it offered the best solution for sustaining all three variants of the F-35.

Tom Burbage, executive vice president at Lockheed, said the United States and the eight countries helping to fund the new plane's development - Britain, Canada, Australia, Italy, Turkey, Denmark, Norway and the Netherlands - had signed on to an agreement under which Lockheed would provide "performance-based logistics" for the new fighter plane.

"At the moment we are the prime contractor for sustainment and it's our intent to stay in that role," Burbage told Reuters, noting that Lockheed was taking care of logistics for the plane at a Florida training base, and was working to set up operational bases in California, Nevada and Arizona.

The company was also working with international partners to identify ways for their local industries to get involved in long-term sustainment of the new fighter jet, Burbage said.

"At the moment, we're heads down working sustainment very hard every day," Burbage said.

(Reporting by Andrea Shalal-Esa; Editing by Gary Hill)

Source: http://news.yahoo.com/pentagon-seeks-competition-sustainment-lockheed-f-35-234753742--finance.html

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