AF grapples with rising logistics support costs


U.S. Air Force officials are placing a keener eye on their spending for maintenance of the fleet, and specifically trying to figure out why the cost of using contractor logistics support (CLS) contracts is rising faster than its own organic depot system, says Lt. Gen. C.R. Davis, military deputy for Air Force acquisition.

Over the past few years, the Air Force -- and the Pentagon overall -- has been more diligent in crafting contracts with more favorable terms for the government to avoid overpaying for developing and buying goods and services. For nearly a decade, the Pentagon seemingly overpaid on a host of cost-plus contracts that overran their targets -- some in the billions of dollars.

The Air Force now is turning its green eye shades toward the operations and sustainment world, where contractors earn billions maintaining aircraft fleets. In sustainment, "I don't think we have gone to the same level of sophistication of these contracts as we need to," Davis tells Aviation Week.

The cost of maintaining weapon systems is increasing year over year, he says, in part because the fleet is aging more rapidly than the Air Force can buy new replacement platforms. But the service is seeing a peculiar trend that it is studying.

Costs for weapon systems maintained through CLS contracts are increasing faster than those supported through the government's organic depot system, a system that is often criticized -- fairly or not -- for being inefficient. "We are just trying to take a look and getting at what are the true costs of sustainment," Davis says.

This review is especially important as the Pentagon tries to understand the forthcoming cost of maintaining and operating the F-35 fleet.

The Air Force alone has not reduced its planned buy of 1,763 aircraft despite the funding crunch. Last year, Naval Air Systems Command arrived at a sustainment figure exceeding $1 trillion for 50 years of F-35 service, stunning Pentagon officials and lawmakers. The services are now refining those numbers.

But just as important as the cost of maintaining is implementing contracts that can manage the government's liability, according to some Pentagon officials, and share in savings that can be produced by industry. While near-term work to better understand CLS and organic depot maintenance costs will affect programs already on the books today, they are sure to be a training ground for the maintenance plan that will support the F-35 in the future.

The F-35 Joint Program Office held an industry day last year to explore various ideas for maintaining the massive fleet, though no results have been released by program officials.

-- By Amy Butler

-- This article first appeared in Aerospace Daily & Defense Report.

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