Washington: Lockheed Martin’s F-35 programme head refused to commit to fully compensating the US Defense Department for delivering parts not ready to be installed on the jet, which may have resulted in more than US$183 million in labour costs.
“It’s not all associated with Lockheed Martin performance. There are many aspects associated with [parts that are] not ready for issue,” Greg Ulmer, Lockheed’s vice president for the F-35 programme, told the House Oversight and Reform Committee.
“I’m committed to meeting with the Defence Contract Management Agency as well as the [government’s F-35 Joint Program Office] to sit down and reconcile the concerns and adjudicate the cost appropriately,” he said.
The Government Accountability Office wants more details about the cost and design of the Operational Data Integrated Network, or ODIN.
Much of the hearing’s discussion centered on a June 2019 report from the Defense Department’s inspector general, which found that the department may have paid up to US$303 million in labour costs since 2015 to correct wrong or incomplete “electronic equipment logs” or EELs. Since then, the Defence Contract Management Agency revised that estimate to at least US$183 million, said Rep. Carolyn Maloney, the committee’s chairwoman.
“That’s US$183 million that the American taxpayers were forced to pay because Lockheed Martin failed to meet the requirements of its contract,” Maloney said in her opening comments.
Since 2015, Lockheed Martin has delivered more than 15,000 parts to the US services with incorrect or incomplete EEL information that prevented maintainers from being able to register a part in the F-35′s logistics system, the inspector general report found. As a result, military maintainers and Lockheed Martin support personnel were forced to spend hours troubleshooting these problems, racking up additional costs.
Lt Gen Eric Fick, who leads the Pentagon’s F-35 Joint Program Office, said that Lockheed Martin and the department are currently negotiating a compensation package that will allow the government to recoup some of those expenses.
“My understanding is that the team has come to an agreement relative to the magnitude of the issue of the problem, but that the consideration offer demanded has not yet been agreed to,” he said.
Lawmakers asserted that, as Lockheed Martin continues to rake in money from its contracts with the Defense Department, the company should be doing more to invest in solutions to the F-35′s technical problems.
The committee’s top Republican, Rep. James Comer of Kentucky, repeatedly asked Ulmer about Lockheed Martin’s recent earnings and revenue.
“With all of this profit, why is Lockheed Martin failing to fulfill the contract and deliver EELs intact and on time?” Comer said.
Rep. Stephen Lynch, D-Mass., said it was unfair for Lockheed Martin to accept contractually permitted incentive payments when the F-35 has so many issues, and he warned that the company could suffer “reputational damage” unless future contracts become more fair.
Maloney also called on Lockheed Martin to deliver internal documents related to the issue that she requested in a June 18 letter, saying that the company had yet to provide some information.
