A potentially $2.6 billion contract awarded on Apr. 1, 2019 to Lockheed Martin [LMT] for sustaining the U-2 reconnaissance aircraft is one of 21 depot maintenance contracts of concern for the Pentagon Inspector General (IG).
“DoD contracting officials may not have negotiated fair and reasonable prices for 21 of 34 sole‑source and single‑source depot maintenance contracts in our sample, valued at $4.6 billion, as required by the FAR [Federal Acquisition Regulations],” the DoD IG said in a new report.
For the U-2 depot contract, the DoD IG reviewed about $53 million of the costs in the contract and found a cost escalation of 12 percent–$6.4 million–because of aging systems.
“While the U‑2 aircraft has undergone multiple modernizations to the airframe, some of the airframe designs are more than 60 years old with the rest being older than 40 years, which exceeds the DoD guide for expected service life for an aircraft,” the report said. “According to the contracting officials responsible for awarding the [depot maintenance] contract, because of the age of the U‑2 aircraft, many of the parts needed to repair it have become obsolete. The contractor agreed that aging aircraft require more frequent depot maintenance repairs, which can be more extensive and costly, and require the contractor to repair more than just typical wear and tear conditions. In addition, the contracting officials stated that most of the skilled workforce familiar with the repairs and maintenance of the U‑2 aircraft have retired.”
The Pentagon IG advised that the commander of the Air Force Life Cycle Management Center (AFLCMC) direct AFLCMC contracting officials to work with the U-2 program to identify “cost‑effective maintenance options for maintaining the aging U‑2 aircraft,” the Pentagon IG study said.
AFLCMC Executive Director Kathy Watern agreed with the DoD IG’s recommendation and “stated that the AFLCMC will continue to execute current, on‑going, and enduring efforts that support the intent of the recommendation,” per the report.
“The executive director stated that the efforts include, but are not limited to, reverse engineering of proprietary tech data to develop technical packages for qualifying other sources and creating competition,” the study said. “In addition, she stated that efforts also include reverse engineering and additive manufacturing of critical aircraft parts, and obtaining full data rights for maintenance requirements on future modifications and acquisitions.”
The Air Force may retire its fleet of 31 U-2s by 2026, but the service has been preparing to sustain the fleet, if needed.
In addition, the Air Force has had efforts to ensure the continued relevance of the U-2. For example, in 2020, the service used an artificial intelligence algorithm by Booz Allen Hamilton [BAH] to steer the U-2’s ASARS-2A radar by Raytheon Technologies [RTX] and to navigate the plane in what the Air Force said was the first time AI has commanded a military system (Defense Daily, Dec. 16, 2020).