Senior Air Force leaders are growing increasingly concerned that Joint Strike Fighter maintenance and operating costs will rise far above previous estimates.
A source familiar with the issue said that the Air Force believes a study performed by the Navy one year ago looks increasingly accurate, based on preliminary data the service has compiled. Buzz readers will remember that the Navy study found the F-35 would cost between 30 percent and 40 percent more per plane than does the current F/A-18 fleet. Since one of the primary goals of the F-35 program, with its web of international partners, was to lower maintenance costs by achieving economies of scale through large program buys by a significant number of countries this would call into question one of the fundamental goals of the program. Another key to achieving those savings was an international PBL contract (Performance Based Logistics). It would spread work share throughout the JSF allies and guarantee greater economies of scale than the U.S. could achieve on its own.
Here's how Lockheed Martin described a PBL in a briefing on PBL: "An alternative logistics support solutions that transfers traditional DoD/MoD inventory, supply chain and technical support functions to the supplier for a guaranteed level of performance at the same or reduced cost at the Platform level." That briefing has graphics showing operation and sustainment costs actually coming down over time for the JSF program, compared to the usual steady spiral upwards.
But the Gates Pentagon has veered sharply away from the idea of PBLs. Dan Goure of the Lexington Institute recently offered this capsule summary of the arguments for and against PBLs:
"DoD executives have repeatedly asserted that contractor logistics support (CLS) and performance-based logistics (PBL) contracts are too expensive and that the government could do the same work for less.
"These kinds of assertions fly in the face of available evidence. Data available to DoD officials clearly demonstrates that private sector support is generally less costly than the same work done by the organic or government sustainment system. The Air Force’s own data shows that the average annual cost growth for aircraft programs supported solely from the organic industrial base was greater than that for aircraft programs under either PBL or CLS arrangements. The Office of the Under Secretary of Defense for Acquisition, Technology and Logistics has identified a set of PBL contracts which collectively have saved the government more than $1.5 billion."
But a source close to the program believes the Air Force is creating its own cost problem by insisting on manning levels based on the F-16. This source said the Air Force is, instead of considering the impact of a PBL when combined with the advanced parts management systems built into the F-35, modeling O and S costs on the F-16 program. Because of the predictive parts monitoring built into the JSF, it should need significantly fewer people to maintain it. The much older F-16 requires many more people to perform maintenance than should the JSF, this source argues. And those people are very expensive, especially over time. So the new model's costs are much higher.
The source familiar with the Air Force position said the service wanted to front-load the early phases of the plane's deployment with government workers instead of, as has happened with most past programs, of relying on substantial contractor support. Since a PBL relies on contractor support that approach would seem to rule out a PBL
Watch for the allies to press hard on this issue. One of the primary reasons many of them joined the program -- aside the from the advanced capabilities of the plane -- was the combination of lower life cycle costs and their chance to help produce those parts.