Now, however, LRIP 5 talks are dragging on. “It should not take more than a year to negotiate a contract, when you have been doing business together for 11 years,” Bogdan says. Lockheed beat out Boeing for the F-35 development contract in 2001, and performance since has been plagued by overruns, design problems and delivery delays.
“We continue to work with our government customer to finalize an LRIP 5 contract that is mutually beneficial to the government, our international partners and the numerous suppliers and stakeholders to the F-35 program,” Lamarca says.
Lockheed officials believe they have time on their side in these contract talks. Knowing the Pentagon has been adamant about keeping the unit cost of the aircraft down—under pressure from Congress—they argue that speed and momentum in the program are needed to quickly ramp up production and reduce unit price through high order quantities. Though previous program managers backed that position, Venlet and Bogdan are taking a different tack. Bogdan is happy to allow talks to drag out. “We can slow down,” he says. With this approach, Lockheed loses an advantage it had enjoyed for years.
Bogdan became deputy director of the F-35 five weeks ago; he must be confirmed by the Senate before ascending to the top program post, and his comments may have been aimed as much at skeptical Senators as at Lockheed.
But he did not speak without backing. Sept. 19, Deputy Defense Secretary Ashton Carter said, “We need a government-industry team that works together,” adding that he is “with” Bogdan “100 percent.”
A top priority is to “shed our baggage,” Bogdan told reporters Sept. 18, noting that program officials on both the government and industry sides who are not willing to cooperate will be let go.
This is not the first public admonition of the F-35 contractor; the relationship has clearly been strained for years. In January 2010, then-Defense Secretary Robert Gates announced a major F-35 restructuring, withheld $614 million from Lockheed and fired the F-35 director at the time, Marine Corps Maj. Gen. David Heinz. A month later, then-Air Force Chief of Staff Gen. Norton Schwartz called out Lockheed Martin when asked if any officials on the industry team should be fired. “Dan Crowley [then-Lockheed F-35 program director] doesn't work for the Secretary of Defense” he said, indicating that the decision was under Lockheed's purview.
It took three months for the company to move Crowley to a corporate post in May 2010, installing the former F-22 program director, Larry Lawson, in the top F-35 job. Crowley now works for Raytheon. In April of this year, Lawson became executive vice president of the aeronautics sector, handing management of the F-35 over to Orlando Carvalho.
Despite the leadership changes, problems continue. One senior Air Force official says, “it is unfortunate that there are stressors and tensions that obviously bubbled up to the top,” prompting Bogdan's comments.
The young F-35 production program has been characterized by contentious and protracted contract negotiations. Bogdan says it is unacceptable that the LRIP Lot 4 talks took more than a year, given that the partners have worked together for 11 years.