Lockheed Martin Offers To Shoulder Risks On F-35 Maintenance With Fixed-Price, Performance-Based Contract (From Forbes)

Lockheed Martin is proposing to assume most of the risk for sustaining the tri-service F-35 fighter. Under an offer presented to the Pentagon in August, the company would reach and exceed fleet readiness of 80% by 2025 for a fixed price, implementing best practices under a performance-based logistics concept. The company says it can save the Pentagon a billion dollars annually compared with the way F-35 sustainment is conducted today, and it is willing to invest its own money up front to get the process rolling. Capability and affordability are usually traded off in military sustainment contracts, but Lockheed believes it can simultaneously increase readiness and decrease costs by refining processes. Among other things, it would reduce the cost of manpower and material, improve inventory control, and automate tasks. I have written a commentary for Forbes here.