Lockheed Martin’s anticipated five-year deal to support the F-35 fleet may not be finalized by the end of this year, and the Pentagon indicates it might not happen at all. Lockheed has traditionally provided spare parts and services under annual cost-plus-incentive contracts and has been advocating since 2019 for a shift to five-year performance-based logistics contracts. However, any deal must satisfy Congress’s performance criteria, which mandates proven cost savings or heightened readiness. Concurrently, Lockheed has also announced delays in delivering the newest F-35 technology configuration, TR-3.
  

Key Points: 

1. Lockheed Martin’s push for a five-year performance-based logistics (PBL) contract for the F-35 fleet faces delays and possible non-approval from the Pentagon.
2. The proposed contract must align with congressional directives from the 2022 National Defense Authorization Act, which demands that the contract should lower costs or enhance readiness.
3. Concerns arise that the Pentagon may lose flexibility if bound to a multi-year deal, especially if anticipated savings and readiness improvements fall short.
4. Lockheed CEO Jim Taiclet discussed setbacks in the latest F-35 tech configuration, TR-3, due to hardware and software integration challenges.
5. If TR-3 delivery delays continue until June, Lockheed might end up with approximately 124 jets awaiting Pentagon approval before they can be shipped.

Source: https://www.defenseone.com/business/2023/09/lockheed-hungers-f-35-sustainment-deal-pentagon-says-it-might-not-happen/390380/