Lockheed Balks at Paying Back $183 Million for Botched F-35 Spare Parts Program

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F-35 Lightning II lands at Luke Air Force Base
The Air Force’s 100th F-35 Lightning II lands at Luke Air Force Base, Ariz, on Aug. 26, 2016. (U.S. Air Force photo/Marcy Copeland)

A top Lockheed Martin executive sidestepped questions Wednesday on whether the aerospace firm would pay back $183 million to the government for failures in supplying spare parts for the F-35 Joint Strike Fighter program.

Citing government watchdog agency reports, Rep. Carolyn Maloney, D-New York, charged that air crews incurred $183 million in labor costs devising workarounds to track and ensure the reliability of spare parts for the F-35.

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"This is unacceptable," Maloney told Greg Ulmer, Lockheed's vice president and general manager of the F-35 Lightning II program, at a hearing of the House Oversight and Reform Committee.

According to a Defense Department Inspector General's report, Lockheed refused in 2018 to reimburse the government, Maloney said. Ulmer was noncommittal when she posed the question again Wednesday.

"We don't need further delays or excuses from Lockheed Martin about these problems," Maloney said.

She asked whether Ulmer would “commit to paying the Defense Department back" for defects in the electronic logs for spare parts.

"It's a complex program," Ulmer replied, adding that not all of the fault rested with Lockheed. His only commitment was "to sit down and reconcile the concerns and adjudicate the costs appropriately."

Maloney said "a contract is a contract," adding "I hope you will change your mind."

Air Force Lt. Gen. Eric Fick, program executive officer for the F-35 program, said negotiations with Lockheed on resolving the spare parts problems and possible paybacks began in April. The issue of reimbursement "offered or demanded has not been agreed to," he said.

Fick and Ellen Lord, the undersecretary for acquisition and sustainment at the Defense Department, said spare parts problems could be traced to software issues in the antiquated Autonomic Information Logistics System, or ALIS.

They said ALIS will be replaced later this year with a new system less prone to errors, called the Operational Data Integrated Network, or ODIN.

The long-term solution will come from replacing ALIS "with a more stable, capable system," Lord said, but Fick noted that the transition "will not be quick and will not be easy."

Both Lord and Fick said they are "keenly aware" of the concerns with the F-35 program, the most expensive weapons system ever procured by the DoD with current costs well over $420 billion and estimates for the 60-year life cycle of the program running at more than $1 trillion.

Fick said it is crucial that maintenance crews "spend their time keeping aircraft available" rather than wrestling with software issues arising from the electronic logs for spare parts.

According to Government Accountability Office and DoD Inspector General reports, the spare parts were not considered inadequate for installation on the F-35s because of safety or reliability, but rather because they lacked the electronic data on the history of the parts and their remaining useful life.

-- Richard Sisk can be reached at Richard.Sisk@Military.com.

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