Lockheed Martin Bags $2.5B F-35 Logistics, Spares Supply Deal

Lockheed Martin won a contract worth $2.5 billion from the U.S. military to support F-35 fighter aircraft.

This contract provides logistics support, to include ground maintenance activities, action request resolution, depot activities, automatic logistics information system operations and maintenance, reliability and maintainability, supply chain management, pilot training, maintainer training, and training system sustainment in support of delivered F-35 Lightning II Joint Strike Fighter air systems for the Navy, Marine Corps, Air Force, Foreign Military Sales (FMS) customers and non-U.S. Department of Defense (DoD) participants, the Pentagon said in a release today. Work is expected to be completed in December 2021.

In addition, the company was awarded an additional $412 million to provide  initial spares to include global spares packages, base spares packages, deployment spares packages, and afloat spares packages in support of F-35 Lightning II Joint Strike Fighter air vehicle delivery schedules for the Navy Marine Corps, Air Force, non-U.S. Department of Defense participants, and Foreign Military Sales customers. Work for this contract is to be completed five years from now.

In a statement, the F-35 Joint Program Office said it awarded the Lockheed Martin industry team annualized contracts covering fiscal years 2021-2023 to support operations and sustainment of the global F-35 fleet, supporting mission readiness and further reducing costs. The annual contracts fund critical sustainment activities for aircraft currently in the fleet and build enterprise capacity to support the future fleet of more than 3,000 F-35 aircraft. This includes industry sustainment experts supporting base and depot maintenance, pilot and maintainer training, and sustaining engineering for the U.S. and our allies across the globe. It also covers fleet-wide data analytics and supply chain management for part repair and replenishment to enhance overall supply availability for the fleet.

"Together with the F-35 Joint Program Office, we recognize the critical role the F-35 plays in supporting our customers’ global missions and the need to deliver this capability affordably,” said Bridget Lauderdale, Lockheed Martin vice president and general manager of the F-35 program. “These contracts represent more than a 30% reduction in cost per flying hour from the 2020 annualized contract, and exemplify the trusted partnership and commitment we share to reduce sustainment costs and increase availability for this unrivaled 5th generation weapon system.”

The FY2021-2023 contracts represent a planned next step in further reducing overall operations and support costs for the F-35 program, which are shared between government and industry. Lockheed Martin has reduced our cost per flight hour by 44% in the past five years, with a forecasted reduction of an additional 40% in the next five years. The cost savings in the FY21-23 annualized sustainment contracts support Lockheed Martin’s efforts to realize these goals.

The contracts also pave the way for a longer-term, Performance Based Logistics (PBL) agreement for the F-35 program. PBLs are an industry best practice, facilitating agile sustainment solutions for the fleet and incentivizing even further affordability and performance results.

The F-35 Joint Program Office, together with each U.S. service, international operators and the F-35 industry team, leads F-35 sustainment and the Global Support Solution. The 2021 annualized sustainment contract will cover industry sustainment activities through Dec. 31, 2021.