tv Pentagon Briefing on F-35 Contract CSPAN October 31, 2019 10:37am-11:14am EDT
house speaker pelosi finishing her weekly news conference, spending a good majority of it on the impeachment efforts, moving forward in the house today. shortly, the house is set to vote on approving the process against president trump. you can watch that debate and vote set for 11:00 eastern this morning as it proceeds on our companion network c-span. i should also tell you in just under an hour, 11:30 eastern, republican leaders will hold a news conference, and we'll bring that to you when it starts right here on c-span3. again, the impeachment vote now set for 11:00 eastern this morning. simple majority needed for passage. watch that vote on c-span. up next, an announcement from the pentagon of a $34 billion contract with lockheed martin for the f-35 fighter plane.
defense officials now talk about what this means for the program. >> as i have consistently said, the f-35 program remains one of my top acquisition and sustainment priorities. earlier this month at our last press briefing, i made a commitment to come back to you when we were ready to announce the next f-35 contract. so here we are. as the f-35 program milestone authority, alongside lieutenant general eric, the f-35 program executive officer, we're here to announce the u.s. department of defense and lockheed martin have made tremendous progress and now have an agreement regarding the lot 12 through 14 production contract. this is an historic milestone for the f-35 enterprise as the f-35 is our largest tack air investment and will form the backbone of the u.s. and allied fifth generation inventory for the foreseeable future.
ans and the joint program office are laser focused on driving cost out, quality up, and achieving timely deliveries of our capability to our war fighters. with respect to on-time delivery, we have exceeded the total aircraft quantity we delivered to the war fighter last year, and we have a 96% on-time delivery rate, a tremendous improvement from where we were last year with an average on-time delivery rate of 64%. on quality, while we have made progress, there's still significant opportunities for improvement, and we continue to communicate specific concerns to lockheed based on the data we collect. the $34 billion agreement for f-35 low-rate initial production lots 12 through 14 includes the delivery of 478 f-35 aircraft,
149 for lot 12, 160 for lot 13, and 169 for lot 14. in support of our u.s. military services, our partner nations, and our foreign mill staitary s customers. this agreement represents our continued commitment to reduce f-35 cost aggressively, incentivize industry to meet required performance, and deliver advanced capabilities to our war fighters at the best value to taxpayers. there are several notable achievements that this contract represents. first, this is the first time the f-35 joint program office will award a significant f-35 aircraft procurement in the same fiscal year as the congressional appropriation year. second, we will reach a unit recurring flyaway, urf, cost per
aircraft target of $80 million for a u.s. air force f-35a price by lot 13, which is one lot earlier than planned, a significant milestone for the department. the f-35 enterprise will continue to save in the lot 12 through 14 contract award. for example, in lot 14, the f-35a unit cost represents an estimated overall 12.8% reduction from costs for the conventional landing variant. the f-35b unit cost represents an overall 12.3% reduction from lot 11 costs for the short take-off and landing variant. the f-35c unit cost represents an overall 13.2% reduction from lot 11 costs for the carrier variant in lot 11. with an average of 12.7% savings across all three variants from
lot 11 to 14. these represent some of the largest achieved savings lot over lot for the program. this contract will allow u.s. men and women in uniform alongside our f-35 partners to maintain a competitive advantage with its unique unmatched fifth generation capabilities. understandably, there will be questions today on the program deviation i told you about earlier this month that is due to delays in integrating the f-35 into the joint simulation environment test infrastructure. the lieutenant general will provide more detail on that shortly. i want to reiterate that i have full faith and confidence in the f-35 program and our ability to deliver f-35 combat capability anywhere in the world. make no mistake, the f-35 is the world's most advanced, lethal, and interoperable aircraft ever
developed. i want to thank congress for their continued support of this vital program. i regularly meet with members and professional staff to provide updates and answer questions so their leadership is greatly appreciated. as the f-35 fleet continues to grow, we're also growing our sustainment capabilities to ensure these aircraft are ready and capable. due to the efforts across the f-35 enterprise led by lieutenant general fick, unit mission capability performance increased from 55% in october 2018 to 73% in september 2019. while we are making progress, we are not where we need to be. we have industry's commitment on accelerating improvements in sustainment. our focus is on improved f-35 fleet readiness and driving towards the service affordability goals.
to that end, we are placing particular focus on accelerating our depot repair capability, accelerating fleet repair modification, and improving autonomic logistics system, functionality, and responsiveness. as of last month, over 440 aircraft have been delivered at 17 bases worldwide with over 850 pilots and 8200 maintainers. on turkey and the f-35, there has been no change to return turkey to the f-35 program. the s-400 air defense system, which is incompatible with the f-35, remains in turkey. as i said previously, turkey makes nearly 1,000 parts for the f-35 and will continue to do so until turkey's f-35 supply chain responsibilities transfer at the end of march 2020. lockheed martin and pratt and
whitney are responsible for that supply chain, so i'll defer any questions to them. in closing, i want to reiterate how regrettable it is that we are again under a continuing resolution. crs cause great damage to our military readiness and disrupt our ability to modernize our strategic forces, including nuclear, for the future. i strongly urge congress to pass the defense appropriations and authorization bill now so that we can move forward with the many important programs needed to ensure our readiness and deter our adversaries. we at dod are grateful for our congress passing a two-year budget agreement that provides the budgetary certainty the department needs to implement the national defense strategy. with that, i'll let the lieutenant general make his statement, and then i'll be happy to answer questions. >> thank you, ms. lord, and thank you, ladies and gentlemen,
for your interest in the f-35 program. the agreement we announced yesterday is a significant one for the program in a number of ways, not the least of which are its size and overall value. 478 aircraft and $34 billion. this total includes aircraft for all three u.s. services, our international partners, and our foreign military sales customers, totaling 351 f-35as, 86 f-35bs. i am proud to be here today to represent the f-35 enterprise and to share with you some of my thoughts on the state of the program. our initial development efforts are coming to a close as initial operational tests and evaluation proceeds, but as you are all aware, we are delayed our milestone c and full rate production decision until such time as the joint simulation environment is available to support the director of operational tests and evaluations assessment of the program. we look forward to his thorough assessment and are working hard with the naval air systems demand and lockheed martin to
fully integrate the f-35 into this complex synthetic environment. this integration is not only critical to the completion of iot&e, but it will be important for future modernization efforts. to that end, while the program has reached initial operational ca capability for all three u.s. services, the united kingdom, italy, japan, and draisrael, an about to do so again in norway, we understand the need to continue its modernization to ensure it stays relevant over time. our mandate to deliver the next increment of capabilities to the program, known as block four, on a very tight timeline, drove us to look at modernizing the air system in a new way, a way strongly influenced by agile developmental methodologies standard in industry today. the continuous capability development and delivery model was born of this need and to date we have fielded four software releases using this methodology. these releases have focused
primarily on the correction of minor deficiencies but have also resulted in the delivery of new capabilities, most notably the life-saving capability inherent in the automatic ground collision avoidance system. through close work with the operational requirements and test communities, the c2d2 process will mature and continue to deliver increments of capability over time to ensure our war-fighting customers stay ahead of the threat well into the future. ms. lord captured well the status of yesterday's production award, including the significant savings we've realized for our fighters and taxpayers. our negotiating teams worked tirelessly on this deal, and i'm proud of the work they've done under excruciating pressure. with this award, we see the most dramatic rate increases in the production line now behind us. lot 12 is 149 aircraft, representing only a 6% increase over lot 11's quantity of 141 and the deltas for lot 14 and lot 13 are similar.
you will recall that the lot 11 quantity was a full 50% higher than lot 10, which was itself 65% greater than lot nine. this dramatic production rate increase has proven to be challenging for the supply chain, but the comparatively minor quantity changes across lots 12 through 14 should give it some breathing room as we move forward. this stabilization will help with the timely delivery of parts to the production line and spares and repairs to the field. speaking of the field, our hybrid product support s integrator team has reached full cape nlt and is kurnly sustaining a fleet of more than 440 aircraft in eight nations around the world, including the u.s., norway, israel, italy, the uk, australia, korea, and japan and operating around the world, both ashore and afloat. the netherlands will join this elite group soon with their first aircraft arrival ceremony happening here later this week.
from a sustainment performance perspective, i'll note that while we fell short of the secretary of defense's 80% mission capability mandate, we have definitely moved and continue to move the needle, increasing the mission capability rate from our operational fleet from 55% in october of 2018 to 73% in september of 2019. operational rate from 55% in 2018 to 73% in september of 2019. within that same timeframe, some deployed units saw sustained mc and mfc levels well above 80% and into the 90s. are we finished? no, are we making progress? absolutely. much but not all of that progress is due to the actions implementsed as a result of the pub li occasion and the execution of a life cycle sustainment plan in early 2019. unlike other plans that tend to be forgotten, this one is
executable. driving deliberate, including accelerating modifications, plan changes to the field, accelerating supply chain capability and capacity and enhancing our reliability. all of those actions are ongoing. i need to acknowledge also that much of this progress is attributable to the significant work of airmen, marines and sailors operating in the field today. they are doing what they do. they make things work. and for that wore extremely grateful. we will continue to work closely with them to realize the full potential of the f-35. we are at a strategic inflection point moving from fielding to modernization, highrate production and sustainment. as we partner with look heed martin and pratt and whitney,
we're changing our relationships with these partners. our contracts are transitioning away from cost focussed incentives and now feature structures that for development, motivate that to agile and able processes i mentioned previously. our contract feature supply incentive fees and performance incentive fees that drive cost reduction. they incentivize and ensure our warphyters have the system they need. we continue to look for ways to -- multiple year and multiyear contracts for production and performance based logistics for sustainment. we are working today with look heed martin to define the program tersz of a sustainment that meet our operational
demands, taxpayer best value, and enterprise demands. in closing let me reiterate that i'm proud to be here today to represent the men and women of the f-35 enterprise, excited to be your officer and looking forward to your questions. >> for both of you, couple weeks ago you acknowledged that there was going to be a delay of production. someone not involved in the f-35 program is going to ask, why is the pentagon putting out a contract for more when they're delaying fullrate production while the combat intoechbded to prove whether it's effective and suitable hasn't been finished. layman's question, yesterday was a $7 billion contract mod. was that the first of the 34 billion or was that more like last november when you put $6 billion on? and in joint simulation environment, what's the earliest you think it will be up and
running? >> so first of all, the department has the full confidence in the planes that are flying today. the air force and the marine corps have both deployed and are happy with the capability. the criteria in terms of getting out of iot&e is to test against threats that we will see ten years from now in the densities we would see ten years from now. we can only do that in a synthetic environment. so we've completed over 90% of the testing. we are very confident in the configuration of the aircraft and are just working on the nuances of working against these advanced threats. so the public should be extremely comfortable with the aircraft that is out there today. the full rate production decision basically codifies the final capability of the aircraft
when we get through the testing. >> relative to your question on the $7 billion, so this is a part of a series of contract awords and obl gaiks that have been made over the course of a number of years and the execution of this effort. if we look back to what was previously announced, we announce the 255 aircraft along with about $11 billion obligation for procurement, and work done previously on uca associated with partners in lots 12 and 13. the announcement yesterday added 114 aircraft. added an obligation of $7 billion for work to begin. in addition, we also obl gaipt the an additional 10 billion or so to look heed that was not included in the announcement because it was previously made for the initiation of those.
the second 10 billion is for the second. >> can you total it up? >> we are still left then with roughly 100 aircraft to go and another $7 billion to go associated with the work to be done for u.s. services in accordance with the pb 20. we don't have that budget yet. we can't make that award for the final aircraft until the time we have the authority to do that. >> $27 billion of the 34 has been obl gaipted piece mooel. >> you've got it. >> $7 billion to go? >> you got it. relative to the jse, it's a synthetic environment that allows us to fully assess the capabilities of the f-35 against a wide range of air and surface threats and threat densities that the director of testing evaluation in his role looks at
the current threat as well as into the future. getting into an environment like the jsc is critical to assess the system against that future threat. the integration of the f-35 into the jse as was mentioned previously is taking longer than anticipated. the early validation runs for the jsc will begin this fall, m midnovember. they'll continue throughout the spring. we believe they'll be ready for march or april and should conclude by june or julie. >> thanks for doing this. could you please explain for the lay person why a brand new aircraft isn't 80% mission capable or above that since all the parts are new? when we've had this conversation before it's because of the cannibalization of parts with older aircraft? >> right. let me give that a shot and then i'll hand it over to erik.
traditionally we're trying to get capability fielded and then we are building the sustainment tail behind that. right now as eric mentioned, we have ramped up significantly throughout the integrated supply chain, and what we found is we did not have the capacity and through part for repairables and spares. we are lagging in some of those repair parts. we are particularly having issues in three areas, one is canopies, two is engine fuel, high dralics and wing tip lens. those are the areas the particular parts that are holding us back. so we believe we are making very good progress and moving forward. >> you did really good. ultimately. i would just amplify a little bit by saying as an aircraft is fielded and parts fail and they
do fail, you take them off and replace them with another. in my prepared remarks a i talked about the rap many that we've been through that affects look heed and how they process aircraft through their production but all of the lower tier vendors that are producing at increasing rates. they must produce spares even above those rates. and making that ramp not just from a production perspective but porching perspective. one of our initiatives is pushing spare purchases. we can get those reed for the main takeners to install them. but to take action both within the existing supply chain and to stand up organic capacity to repair the parts so they're available to the field to re-install them. that's been a huge part of this effort to drive higher mission
capability rates, making sure they have the parts when they're needed. >> i've got a couple finky numbers questions. if i heard you right, i think you said lot 12 has 149 aircraft in it. is that correct? and if so, i think the only lri number was 157 aircraft. what's the reason for that difference? were those turkey aircraft? and then secondly, you're saying that there's an average 12.8% reduction. in the handshake deal it was said there would be a drop of around 15% from lot 11 to lot 14 across all vare yants. so is that just a nonapples to apples comparison? can you put it in context for me? >> i can't address the 157
number off the top of my head. i'm going to have to go back into time to figure that out and circle back to you. relative to the discrepcy between the 12% and roughly 15%, the air vehicle reduction from lot 11 through 14 for the a models was 14.4%, for the b models, 15.3% and for the c, 14.6%. when we add in the enjirch the reductions for the fraction of the flay away cost reduced at a much lower rate. the engine rates are only down on the order of 3% between lot 11 and 15. when you sum those together it brings the cost at the unit recurring flay away level down to roughly 12 to 13%. that's the difference. >> miss lord, dr. roper at the air force is pursuing something
called digital series where he thinks in five years they could get an airplane of the next technological generation to outfit the air force. could you explain for us how at least for the air force and maybe for the other services, the f-35 buy might be modified to accommodate digital century series air plains and how that will be squared against the f-15 ex. >> we are staying the course. i will say will roper and the team are doing innovative interesting things. we look at the total capability here versus the adversary, and we find a place for the f-35, the f-15 and the new sentry cerise. we continue to night and focus on the future and optimize what we will have for a fleet in the
future. but we are taking all of this in aggregate with a mission engineering approach using the assets we have. >> at this point there's no revision or rethinking of the 1763 for the air force? >> no. >> i wondered if you could provide some more details on the technical issues that you're working through with the joint simulation environment? and then second where you mentioned the pbl force sustainment. look heed has said that something have sort of pbl in place is crucial to achieving the $25 million cost per hour by 2025. is that your position as approximately? and do you now think that that goal is achievable? we've heard some mixed things from pentagon on that? >> sure. first relative to the jse, i wouldn't characterize that we
have any specific technically challenging hurdle to overcome, but there are a lot of smaller hurdles to overcome. ultimately what we're doing is taking a digital representation of the aircraft and integrating it into a representation of the threat space to include ground threats, air threats. both blue and red weapons. environmental effects, all of those things. and we're integrating them together so that the systems talk to one another digitally. that's a big task. we got-off to a slow start due to disagreements on how to proceed. there was no jsc back in the early days. it was an environment we were going to do that work. we elected about two peos back out to pull that out and put it into a u.s. government owned that would allow us to integrate other aircraft from other manufacturers.
that's the reason we went to the jse. again there's simply a lot of work to be done. as we do that integration, and as we make progress, the system rolls more of those pieces into the fights, they get more complex and you find more things. >> did the program office underestimate how much work needed to be done? >> i don't know that we under estimated how much work to be done but we struggled getting out of the gates in particular with our relationship with lockheed in doing that. their relationship is better now. we're working side by side with teams of embedded lockheed coders, doing that integration and they're making decent progress. >> we're going to go marcus, nick, john. >> general, both of your predecessors have talked about the strange relationship with lockheed martin and pratt
whitney over the years. i was hoping i could get your thoughts on how you characterize the relationship now and where there might be areas for improvement? >> i think between myself and gr greg, and others, that the relationship is much improved. i have daily conversations at my level. i know these talk regularly as well as miss lord -- i'll let you speak to your own relationship. but i think i have a very open and trusting relationship with my counterpart at lockheed martin. it is still a business. we work through the balance of that working to find the balance between a taxpayer and war fighter friendly solution that meets the business objectives. we need them to stay in business to continue building these aircraft but we're not doing it at any cost. >> the canopies, are they just
breaking? cracking or breaking? or are they breaking at a higher rate? >> the issue has to do with the loss of the coating that's applied to the outside. we're working to mitigate that with the prime contractor, lockheed and their subs. >> thanks for doing this. undersecretary, turkey, a couple of questions. the s-400, what is the status of that deployment? has it been turned on? has turkey slow rolled or delayed the parts it is still working on? you've talked about the cost increase because of turkey's removal. has that stayed the same? >> first of all, we enjoy very, very good mill to mill relationships with turkey and turkey is an excellent supplier. at this point, i'm getting lost in some of your questions here.
you were asking -- >> 400 -- >> s-400, we anticipate that being fully operational towards the end of the year. >> and then you said excellent suppliers, no delay in turkey supplying -- >> no. turkey has been very forthcoming. again we're on the path to march 2020 to transition all of those parts out. >> cost increase, you've said it before. >> we, the u.s., because we took responsibility for moving the parts out, absoirkd about a $600 million bill for that. we are still working through any unit price adjustments. we think those will be modest. but any adjustments that might take place due to those parts moving. >> john? >> when will the delay in the far-a start to delay?
and is it inevitable? >> i will issue documents before the christmas holidays on our path forward, and we do not see this constraining production whatsoever. >> can i ask a clarification. >> pat host. what role is osd and the jay pole playing in the development of the air force's jse? randal walton made it seem like it's not doing a lot of talking with the navy and we all know how messed up the navy's jse is. >> oh, my. one of the functions of osd is to act as the corporate entity across all of the services. so that's the reason i have a technical staff working under kevin feyhy as asda. what we do is bring the services
together to make sure we pass along critical information. the main way i do that is i meet biweekly with all three service acquisition officers and i meet with them individually. where as waldo might not be up to speed with everything going on in the navy, joint simulation environment, i will tell you that members of hon doe gurts team as well as will roper's team are very involved in that. as you know we have air force and navy billets in the joint air force office. we cycle people in and out. we have integration offices. one of the reasons osd exists is to make sure we have cross pollination. >> last one. >> thanks. can i just get an update on this new pricing and how you expect it to drive international demand? and run through the list of folks solid in the international
new interest bucket and further afield in terms of competitions that you might be eyeing? >> there is no significant change in pricing here that i think would drive any decisions one way or the other. we have quite a few active discussions on fms cases. >> we do. we have active discussions ongoing with a number of customers. we've talked to poland, singapore, among others. that overall list is about ten different countries. i won't rattle them off. i think you can look to anyone flying a u.s. mds and think of them as potential customers. >> we're going to stop there. do you have any closing remarks? >> i want to thank you all for coming today. you will see a renewed focus on sustainment over the next 12 months out of my office working with the j-pole. we are taking a very data driven approach towards a potential pbl with lockheed martin.
we are working hard at understanding where the operational availability, the mission daipability and where the costs per flight hour are being driven, and making sure we come up with a win-win situation for both the war fighter as well as the tax pair. >> on the thousand parts, are those a thousand individual parts or part types? >> individual parts. >> okay. thank you, ladies and gentlemen. >> my only thought was that i would not characterize the jse as all messed up. there's work to be done. >> what are the less ones learned? what are you doing differently? all right. now the house is in the midst of a vote series to proceed with an impeachment inquiry against president trump. they're starting with a procedural vote, and that will be followed by the resolution by
jim mcgorch. that lays out the next steps for the impeachment investigation. you can check our website to see how republicans if any vote in favor of the measure and how many democrats vote against it. go to c-span.org for that information. coming up at 11:30, we expect house republican leaders to gather to hold a news conference. we will bring that to you live when it gets underway. in the meantime comments from house speaker nancy pelosi, she talked about the democrats' agenda and the impeachment inquiry. probably nobody here because the gallery uncharacterristicly is full.