As the F-35’s expected price tag settles around $165 million per plane, DoD is trying to trim the much larger operations-and-maintenance bills to come.
The Pentagon, which has spent the last four years lowering the purchase price of the F-35 Joint Strike Fighter, is now taking aim at the costs of flying it.
The headline-grabbing $400 billion price tag for developing and buying 2,443 U.S. F-35s is less than half the cost of operating, maintaining, and upgrading all of those jets for the next half-century. In March estimates, various Pentagon offices put the total of those expenses at $859 billion and $1 trillion.
Top program officials met this week with executives from the companies that are building the F-35. The annual summit had a new venue — Norway, not the jet’s Fort Worth assembly line — and a fresh agenda: having largely moved beyond nagging design and production problems, the group discussed the future of the world’s most expensive weapons program.
“At this meeting, there’s a fundamental change in our direction,” Frank Kendall, the Pentagon’s acquisition chief, told reporters on Friday. “We’re turning our focus much more toward fielding the program, upgrades in the future and getting whatever efficiencies we can going forward.”
The centerpiece of the effort is changing the way the military pays for the jets’ maintenance and support. Instead of using standard fee-for-service agreements, DoD wants performance-based contracts that reward companies for keeping readiness and capabilities up and costs down.
“Basically, we want to have as much competition [between companies] as possible,” Kendall said. “We want to have strong financial incentives in to get us as good a performance as possible and we want to be sure we have a system that supports everybody involved in the program.”
Historically, the Pentagon has saved 10 to 15 percent by switching from contracted to performance-based support, Kendall said. “We’d expect to have something on that order, at least, in this case,” he said.
There may still be savings to be wrung from the purchase price as well. Kendall said the Pentagon is considering inking a three-year contract with lead F-35-maker Lockheed Martin beginning in 2018 for as many as 450 jets for the U.S. and allies. “We’re feeling optimistic enough about the program that we’re going to proceed with the planning on that and we’ll be talking to the Congress about it.”
Buying that many aircraft together could yield savings in the “double-digit” percentage range, he said.
NEXT STORY: The Future of the Draft