Lawmakers strain Lockheed to pay again Pentagon for F-35 components issues

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WASHINGTON — Lockheed Martin’s F-35 program head on Wednesday refused to commit to totally compensating the U.S. Defense Department for delivering components not able to be put in on the jet, which can have resulted in additional than $183 million in labor prices.

“It’s not all associated with Lockheed Martin performance. There are many aspects associated with [parts that are] not ready for issue,” Greg Ulmer, Lockheed’s vice chairman for the F-35 program, advised the House Oversight and Reform Committee. “I’m committed to meeting with the Defense Contract Management Agency as well as the [government’s F-35 Joint Program Office] to sit down and reconcile the concerns and adjudicate the cost appropriately.”

It was a response that lawmakers on the committee — which held a listening to July 22 to discover the beleaguered jet’s ongoing sustainment issues — weren’t pleased with.

Much of the listening to’s dialogue centered on a June 2019 report from the Defense Department’s inspector normal, which discovered that the division could have paid as much as $303 million in labor prices since 2015 to right unsuitable or incomplete “electronic equipment logs” or EELs. Since then, the Defense Contract Management Agency revised that estimate to no less than $183 million, stated Rep. Carolyn Maloney, the committee’s chairwoman.

“That’s $183 million that the American taxpayers were forced to pay because Lockheed Martin failed to meet the requirements of its contract,” Maloney stated in her opening feedback.

The F-35 program is the one program to hyperlink an plane half to an EEL, which serves as an digital file of the half’s utilization and life span and can be utilized by the navy to tell upkeep and shopping for practices.

But since 2015, Lockheed has delivered greater than 15,000 components to the U.S. providers with incorrect or incomplete EEL data that prevented maintainers from with the ability to register a component within the F-35′s logistics system, the inspector normal report discovered. As a consequence, navy maintainers and Lockheed assist personnel have been compelled to spend hours troubleshooting these issues, racking up extra prices.

“Every time a pilot gets into those planes and flies into the sky, they’re risking their life,” Maloney advised Ulmer. “A contract is a contract. And the contract says you will deliver a plane — which you’ve done beautifully, it’s a beautiful plane. But it also says that the material that is needed to fly that plane have to be delivered too.”

Lockheed Martin employees work on the F-35 Joint Strike Fighter production line in Fort Worth, Texas. (Defense Contract Management Agency)
Lockheed Martin workers work on the F-35 Joint Strike Fighter manufacturing line in Fort Worth, Texas. (Defense Contract Management Agency)

Lt. Gen. Eric Fick, who leads the Pentagon’s F-35 Joint Program Office, stated that Lockheed and the division are at present negotiating a compensation package deal that may enable the federal government to recoup a few of these bills.

“My understanding is that the team has come to an agreement relative to the magnitude of the issue of the problem, but that the consideration offer demanded has not yet been agreed to,” he stated. In different phrases, Lockheed and the Pentagon have agreed on the scope of the settlement, however not how a lot cash Lockheed pays again to the division.

Lawmakers asserted that, as Lockheed continues to rake in cash from its contracts with the Defense Department, the corporate needs to be doing extra to put money into options to the F-35′s technical issues.

The committee’s prime Republican, Rep. James Comer of Kentucky, repeatedly requested Ulmer about Lockheed’s current earnings and income.

“With all of this profit, why is Lockheed failing to fulfill the contract and deliver EELs intact and on time?” Comer stated.

Rep. Stephen Lynch, D-Mass., stated it was unfair for Lockheed to just accept contractually permitted incentive funds when the F-35 has so many points, and he warned that the corporate might endure “reputational damage” except future contracts grow to be extra truthful.

“I do believe the F-35 is probably one of the finest aircraft out there — when it flies. When it flies. And that’s the problem,” he stated. “So you’re on notice, Mr. Ulmer.”

Ulmer responded that Lockheed has spent $30 million to resolve an issue with the digital logs, and that the corporate is negotiating in good religion with DCMA on a monetary answer on the labor problem.

“We’ve had six direct meetings with the DCMA since April 2. We were meeting with the DCMA prior to April 2 to work on this issue together,” he stated. “You have our resolve to fix this problem.”

Maloney additionally referred to as on Lockheed to ship inner paperwork associated to the problem that she requested in a June 18 letter, saying that the corporate had but to offer some data.

“It’s upsetting to me. If you can’t deliver a document, I have no trust that you can deliver a plane that’s going to operate [correctly],” she stated.

As late as final 12 months, the issue of managing digital logs for spare components was so severe and systemic that it was designated a “category 1” deficiency — the Pentagon’s label for important technical flaws that prohibit the jet’s means to be prepared for fight or carry out its major missions.

But on Jan. 13, it was downgraded to the lesser “category 2” standing due to “data quality improvements” that “have reduced the frequency and magnitude of issues that have impacted operational units’ abilities to quickly release aircraft for flight following maintenance,” the F-35 Joint Program Office advised Defense News in April.

Ever for the reason that IG report was launched final 12 months, the Defense Department has taken main steps to attempt to repair the EEL downside, stated Ellen Lord, the Pentagon’s undersecretary for acquisition and sustainment.

“The department has increased the RFI [ready for issue] rate at Hill Air Force Base, Luke AFB, and Marine Corps Air Station Yuma from 43 percent in February, to exceeding the RFI threshold metric rate of 70 percent in every month since April, achieving a high of 83 percent in June,” she stated in testimony delivered to the committee.

Action requests made to Lockheed to resolve EEL points have additionally sharply decreased, from greater than 1,100 requests in March 2020 to 363 in June — decrease than the edge metric of 389, Lord stated.

Ellen Lord speaks during an annual meeting of the Association of the United States Army in Washington. (Mike Morones/Staff)
Ellen Lord speaks throughout an annual assembly of the Association of the United States Army in Washington. (Mike Morones/Staff)

“The F-35 JPO is also working to negotiate more comprehensive contract terms in future sustainment contracts to ensure that the contract has defined EEL and RFI metrics to measure performance,” she stated.

Much of the development that has occurred since 2019 has been as a result of reforms put in place by a staff made up of presidency and trade stakeholders, stated one protection official, who spoke to Defense News on situation of anonymity.

Of the 65,000 distinctive components on the F-35, solely about 1,000 have EELs — normally, components that may be repaired, the official stated. All F-35 components which have an EEL even have a bar code related to a particular half quantity, a serial quantity and a “cage code” that signifies the provider, as some components are manufactured by a number of corporations.

One of the most important issues associated to EELs occurred when a navy base accepted a brand new spare half. Typically, Lockheed sends every half with an “advance shipping notice,” a set of paperwork that features details about the half that may be plugged into the F-35′s IT spine — the Autonomic Logistics Information System, additionally developed by Lockheed — to course of the half and convey up the EEL data.

However, if that advance transport discover doesn’t arrive, incorporates incorrect data or doesn’t match with the EEL data, what needs to be a “six- to eight-step [process]” turns right into a “66-step [process],” the protection official stated.

In February, the staff applied quite a few software program fixes for ALIS that might assist lower the variety of EEL issues. It additionally made enhancements to the advance transport notices to make sure that components arrive correctly labeled and with the right data, the official stated.

That month, the staff additionally determined to chop down the variety of components which might be related to EEL information, decreasing data-entry necessities. It plans to take away the EEL requirement for 44 p.c of air car components that at present are tracked with digital logs; and by March 2021, these components may have gone by way of the method of getting their EELs eliminated.

The protection official stated this system will proceed to make use of EELs for components which might be important to security or have a restricted life span, however that this system was gathering life cycle knowledge for a lot of components the place that data traditionally hasn’t been tracked in legacy fighter packages.

“I think when you have the ability to start collecting all kinds of data electronically, maybe we were too aggressive on how many parts we assigned EELs to,” the official stated.

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