Pentagon rejects performance-based sustainment for F-35
Defense One reports Lockheed Martin and the Pentagon have returned to negotiating a traditional annual sustainment contract for the F-35, moving away from a proposed five-year performance-based logistics (PBL) deal. This despite continued supply chain issues and poor fleet readiness stats.
Lockheed had pitched the PBL arrangement, which would have seen the company manage the entire F-35 supply chain under a firm-fixed-price contract, assuming financial risk in exchange for five years’ guaranteed work. It goes without saying that no one else could perform this work.
The Pentagon rejected the PBL approach, doubting it would deliver promised cost savings or improved readiness. Traditionally, fixed-price contracts are seen as advantageous to the government. Instead, the Pentagon apparently doubts the PBL approach could sustain high operational tempos and and risks increasing reliance on a single supplier. DOD is exploring whether PBL might be suitable for specific elements of the F-35 program.
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