DoD To Conduct ‘Deep Dive’ To Make F-35 More Affordable

The U.S. Department of Defense is launching a “deep dive” with industry to look for ways to further cut the cost of the F-35 Lightning II, a DoD official said Oct. 23.

“We’ve got the team assembled, we know what we want to accomplish, and we’re getting ready to go to work,” said Shay Assad, director of defense pricing in the Office of the Secretary of Defense.

Hill Air Force Base F-35As fly in formation over the Utah Test and Training Range, March 30, 2017. (U.S. Air Force photo/R. Nial Bradshaw)

Hill Air Force Base F-35As fly in formation over the Utah Test and Training Range, March 30, 2017. (U.S. Air Force photo/R. Nial Bradshaw)

The “extensive,” year-long review will scrutinize the new fighter jet to identify ways to produce and sustain it for less money, according to Assad.

“The whole purpose of the review is to work with the companies in understanding” what the cost-saving opportunities are, he told reporters after speaking at an Aviation Week Network conference. ”There’s no doubt that this is a game-changing machine. It is a world-class capability. We just want to be able to afford everything that we plan to buy.”

The first step will involve DoD officials meeting with F-35 prime contractor Lockheed Martin [LMT] and principal subcontractors BAE Systems and Northrop Grumman [NOC] “in the next couple weeks” to explain how the deep dive will proceed. The three firms will be asked to enlist their suppliers in the cost-saving campaign.

"This is hard industrial engineering, manufacturing engineering," he said.

While declining to offer a specific price target, Assad indicated that he expects the review will help push the procurement cost of an F-35A, the Air Force’s conventional-takeoff-and-landing variant, below $80 million per aircraft.

“I’m very optimistic,” he said.

The program is already on track to reach a per-aircraft cost of $80 million for the F-35A in Lot 14, down from $94.3 million in Lot 10. The Lot 10 deal, which covers 90 jets across all three variants, was announced in February.

In a statement, Lockheed Martin pledged to "work closely" with DoD on the deep dive. "We'll also work to ensure all savings efforts do not introduce additional risk to our supply chain or program delivery schedules," company spokesman Mike Friedman said.

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