The program for the Lockheed Martin [LMT] F-35 fighter could achieve significant sustainment cost savings in the coming years, per a section of the Government Accountability Office’s (GAO) 2022 annual report released last week.
“The Department of Defense could reduce F-35 sustainment costs by hundreds of millions, or even billions, of dollars over several years by developing a strategic approach to ensure that the services can afford to operate and support the F-35,” GAO said.
Thus far, “DoD does not have a pathway to close the substantial gap between estimated sustainment costs for the F-35 and service-established affordability constraints, nor is it required to periodically report to Congress on these,” the report said. “Cost reductions become increasingly difficult as the program matures, and achieving cost reductions of this magnitude in sustainment costs presents a formidable challenge for the program.”
Last July, GAO said that since 2012 estimated F-35 life cycle sustainment costs over 66 years have risen to $1.7 trillon, including an increase in operations and sustainment costs from $1.11 trillion to $1.27 trillion despite DoD cost reduction efforts for the 400 aircraft fielded and the overall planned buy of 2,500–the largest of which is the Air Force’s planned buy of 1,763 F-35As.
The latter cost $7.8 million per aircraft per year to operate and maintain in 2020–$3.7 million more than the affordabilty target for the F-35A, according to the F-35 program. That represents $4.4 billion in extra costs projected out to 2036 when the Air Force will have bought 1,192 F-35As and is the largest cost overrun for the three variants of the plane. The Marine Corps’ F-35B and the Navy’s F-35C have smaller projected overruns, as the affordability targets in annual operating and suatinment costs are higher for those variants–$6.8 million per aircraft for the F-35B and $7.5 million per aircraft for the F-35C.
By 2036, projected operations and maintenance costs on the three F-35 variants will exceed affordability constraints by $6 billion, GAO said.
“As a result, the services collectively will be confronted with sustainment costs that they project will be unaffordable over the life cycle of the program,” per the report.
The F-35 program said that it wants to use Air Force and Navy personnel more for fighter supply chain management to help reduce costs. DoD and the F-35 program told Congress last month that one option would be for the Air Force and Navy to spend about $500 million for the delivery of parts specifications from the subcontractors who build thousands of parts on the fighter, while another option, under DoD’s Pathfinder initiative, would be for the F-35 program to use the technical data specifications of parts on other platforms at low-cost or for free (Defense Daily, Apr. 29).
“There are differing perspectives on the best course of action to achieve the affordability constraints and the program does not have a strategic approach for ensuring the services can afford to operate and support the F-35,” GAO said in last week’s annual report. “GAO suggested that Congress consider (1) requiring DoD to report annually on progress achieving the services’ affordability constraints, and (2) making future F-35 aircraft procurement decisions contingent on DoD’s progress in achieving F-35 sustainment affordability constraints.”
DoD told GAO in March that the Pentagon “is working to develop updated F-35 sustainment affordability constraints by the end of 2022 to reflect any changes in department priorities that result from the fiscal year 2023 budget process,” per the report.