Leaders Testify to House Committee on F-35 Joint Strike Fighter Program

Ellen M. Lord, undersecretary of defense for acquisition and sustainment; Air Force Lt. Gen Eric T. Fick, program executive officer for the F-35 Lightning II Joint Program Office; and Theresa Hull, the Defense Department’s assistant inspector general for acquisition, contracting and sustainment, testify at a House Oversight and Reform Committee hearing on the F-35 joint strike fighter program in Washington, D.C., July 22, 2020.

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So the search respectfully, the $30 million cost for those six planes accounted for the induction of those aircraft into long term storage on the the work required to preserve them in that condition. So that’s not work that we normally would do to an aircraft on a flight line, because ultimately our goal, our objective there is to continue to fly them. I could certainly get you a breakdown of the costs associated with that entry into long term storage and then, with the annual costs, are associated with storage of those Turkish jets. Now, I have been surprised finding we have these contracts being renewed every year and then still, the contracts don’t seem to be getting any better. Are their performance metrics that are required penalties for not meeting them? Um, I mean, these are things that are seen basic in the corporate world that we seem to have a hard time doing when it comes to military contracting. Congressman, I’d like to address that. I was in industry for 33 years before taking this job about three years ago, and my primary energy has been put into rewriting the opposition system for the department of defense. So we used to have one large one size fits all system, and we’ve broken that system down into six individual pathways. So, for instance, for talking About Oden, which is the upgrade from Alice, were using modern software techniques on that. So we are tailoring to your specific questions about sustainment. What we’re doing is refining the incentive fee structure, going back and getting the voice of the customer, understanding what it takes to get aircraft operational and making sure that as we write in Senate fees, there is a very clear linkage there. Additionally, we’ve said multiple times this morning that one of the root causes of the eels problems in the or if I problems are Alice thesis oft where system we used to collect data and maintain the information. That’s an out of date system and what we’re doing in developing Oden, its replacement is going directly to the maintainers and getting the voice of the customer to make sure we drive software requirements from frontline user what they need versus someone sitting in a lab, deciding that for them, thank you. My time’s expired out to say it’s extremely important that we owe It’s an American taxpayer. It’s a patriotic duty to do this right efficiently and require Locky to pay penalties when they don’t get it right. Mr. Steele back Germany goes back Chair recognizes ranking member. Mr. Chairman, I asked for unanimous consent to clarify Mr Almost response to my questions. First, you’re second quarter profit is $1.6 billion. Second, your fiscal year, 19 profit was $6.2 billion. So I renew my question, which was, why is lucky failing to fulfill the contract and deliver ills intact and on time and ask for these documents to be in the record and you repeat your question. Right? OK, so, Mr Palmer, I hope you heard that without objection. The documents are accepted. Chair now recognizes the gentleman from Virginia, Mr Conley for five minutes. Thank you, Mr Chairman. That thank you for this day has some rapid park questions of this more. What’s unique about the 35 program? There are a long list of things that make it a unique program, but about many different things. It’s it’s one. It’s an international program. It’s not just a U. S program, so international partners put some proposes allies like the British and the National strategies have a voice in decision look, lovely interrupt. But isn’t there something else? The J 35 is me. The F 35 is replacing. Always strike fighters, right? Yes, it’s designed to replace a number of of legacy fighters across three different services the Brink or the Navy and the air cliffs. And we haven’t done that before. We’ve never We’ve never had a single system that was designed over fresh. Three different. So that’s what’s unique. The stakes here are enormous. They affect all of our services were never done this before, and it’s a critical piece of US defence and offensive capability as well. Um, you g a o this more, uh, going back to 2014. Provided a number of recommendations. Two D o. D. The project manager, which we have focused on a lot yet including trying to create a performance measurement for Alice back in 20 September 2014 were those recommendations adopted by the OD. That specific recommendation has not been adopted, repeated again in our March 2020 report and permitted over to conferences to get Congress take action should sure that that happens, So oh, why did happen? I mean, get over one today. You think with the stakes this high on this unique program D o. D. Would run that walk to make corrections to a system that was defective and you documented it back in 2014 6 years ago. I completely agree. We definitely want to see you dampen that. All of our recommendations desperate, but as possible about my court concerned that haven’t done it yet. Why, Why not? Well, over the years we’ve heard from them that they have a number of other issues to address for the up 30 flight program we’re talking about today is one of many sustainment challenges that they’re facing. It’s also a very difficult thing for them to do, but we think it’s vital because it will. It happens. I never know what what’s good enough when it’s going to be. But now we’re in a place where sustainment is the major problem in the guest, uh, 35% because they ignored it. You were recommendations and those of the D. O d I g. Miss Help were your recommendations over the years implemented by the project in a spin offs. The Joint Program office agreed to our recommendations in our June 2020 19 report. However, we’re waiting for supporting documentation to validate that they have implemented the recommendations. In your testimony, you gave us a long laundry list of issues that were seemingly cavalierly ignored by the Joint program office over the years. Is that correct? Uh, yes. I touched on the Ile issues, sir. And then they also the incentive fees. And even when they were getting feedback from the field from pilots from command centers in the light, they still didn’t changes. That would have gone some way. We’re Ameliorating problems. Is that correct? The joint program office in October of 2018 issued guidance allowing the parts to go on the aircraft without the Elektronik equipment, logbooks and additional labor duty. Labor was used with workarounds to make sure the parts could get on the aircraft for it to fly. The Alice program we’re talking about that was created by Lockheed just for this program. Is that correct? While Alice wasn’t a direct focus of our report is my understanding that that is true eyes that your understanding this more Yes, Alice was created specifically for the F 35 and, UH, it was approved by the Joint Project office. Is that correct? That is correct. It was approved nearly 20 years ago, 20 years ago, so has been updated. It’s been updated several times that did not go fully. Operate. Alice did not go fully operational. It’s about two years ago, 2018 at a number of problems all over when getting rolled out, there been a number of updates. But the central problem is it’s never that user needs. We’ve heard some the helmets neighborhoods got better, and certainly it’s downloading faster, and users conflict things faster. But the bottom line is there. No performance measures in place to assess for their users are getting what they and heat. So that’s in places that we’re not going to know when it’s good in our And for the record, you advised the Department of Defense six years ago that it needed such performance metrics. Yes, we get record production department, and they did not act on that recommendation. They have taken some actions, but it’s not been sufficiently close to my final question. Mr. Chairman, this more had they accepted that recommendation when you made it. Do you believe that some of the problems were chronicling today in this hearing Could have been avoided? Yes. I think if they had fully implemented the recommendation at such nice 15 or 2016 accretive potentially investigated a number of the problems you talked about. I would just say, Mr Chairman, we focused on correctly, you know, the shortcomings of the contractor. But we also as the oversight committee, need to focus on the shortcomings of the management of contracting and the contractor. And I think this hearing and this testimony we just heard from this columnist for certainly should give us pause about how confident the oversight management of the single most important new fighter aircraft in the history of the United States has been. You back. Think of the gentleman. Yields back the chair now recognizes the gentleman from Ohio, Mr Gibbs, for five minutes. Thank you, Mr Chairman. Mr. Almer, I hope you’re still there. Do Legacy aircraft have heels? I’m sorry, Congressman. Repeat the question. Do legacy aircraft have heels? No, sir. No congressman. So I guess my thought is is because because the F 35 is such a sophisticated, complicated, highly technological aircraft is Is that the reason why I had the program for years? How do you or how do you do it with the legacy aircraft for parts more sing? Yes, sir. The maintenance system for legacy airplanes are more segregated, Not integrated systems that support specific platforms. So this is, Ah, attempt. The the Alice in the electronic equipment logbook approach relative to the technology really is about an integrated sustainment. Says I t sustainment system for a platform. Okay, General thick. Do the deals pose any safety concern of risk? Is that so? My understanding from talking to the maintenance group commanders in the field that authorized their aircraft to fly in the event that apart is not. Or if I there is not a safety concern associated with flying aircraft with those parts, they will not. They will not allow apart to be installed in the aircraft, if that’s okay. I got that. So So So the issue is not getting those parts readily available and in place. So they’re crafting flies. That’s what the issue is. So I guess the next that would be how how much delay our, uh you know, f 35 have been grounded. You know what, where we are that because of that because of that? So we have. We have mixed data from our those commanders in the field relative to the times at which they have allowed those aircraft to fly without heels. We have really good air information from from one of the installations in particular that we’re using T kind of sort through and figure out well, I’ll call an adjudication of what the rial impact would be from a cost incentive perspective. We have other information from other wings that is less less clear. And then still other wings. I’ll say the Navy, the Marine Corps particular, are not allowing the aircraft to fly period with Nana fry parts, so there’s not an issue with them. Okay, um, I just heard. I guess the person with their office talking about the Alice program just rolled out two years ago. But then I heard earlier testimony that it was a program that started way before that. Is that so? Alice has been around for a long, long time. I don’t know. I think 2000 and I did hear it doesn’t have the technology of the iPhone that the newer Softwares and stuff. And so whose fault sat? I mean, is that discovered bureaucracy? Or is that was that was that was that happened at the Fokker has been around for a long time, but I just got rolled out two years ago with technology that’s out 10 years outdated. Eso the first. I can get you the exact date, sir. But the first Alice versions, I believe, rolled out in the 6 4007 timeframe and have been updated on a 12 to 18 months and McCain’s. Since then. We had a substantial update to the Alice system as we entered I O. T. And he and we have continued to update from was what? When I entered the program a couple years back, it was Alice. 2.0, we moved 2.4. We moved to 30 or 31 The version in the field today that 87% of the units have is Alice 3.5 point two, which is the most recent innovation. Greg mentioned that we’re going to quarterly release around time. I would ask another question. Whoever wants answer. I guess this f 35. The whole system is. We know it’s high, sophisticated, very complicated. High technology, technological is it? Is it fair for Lockheed Martin on the contract because you’re in a whole new, you know, area sophistication? Was it right to have a contractor with they they couldn’t do Because so many unknowns bringing the system on tonight is, I guess I’m just floored. That might be a question of you. We have different contract types that correlate with the risk involved. When there’s, ah, high level of development and unknown. We do cost plus type contracts where we pay for what is needed, and there’s a different level of fee. Then, when it’s more known, when you get into full rate production, for instance, those are fixed price contracts with incentive fees for meeting certain criteria. So where we are in the Department of Defense is really working to make sure all of our contracting officers have all the different techniques, so we’ll see just 35 been developing for quite a while now. They’re starting do a lot more appointments. So we moved in that second face for production, and then what? We are in the midst of doing is developing sustainment contracts that air better tailored and you’re seeing Are you seeing better results now, since it’s gone along with working with the manufacturer Lockheed Martin? Well, we started out when I got involved with the program three years ago. Absolutely. From a production point of view, we got much, much more fidelity and around what was happening on the manufacturing floor. I will say that the Department of Defense has an enormous amount of data now relative to that versus where we were three weeks ago, I would say we’re just turning our real focus on sustainment now and just beginning to build that robots state a set. So we have a number of teams working on the Alice to Odin transition as well as the You’re confident, optimistic, that cost overruns, all that things are gonna get better improving. I am confident that we are making progress, but I think we still have a way to go in sustainment. Okay. Thank you. I’m out of time to go back. Gentleman yields back the chair now recognizes the gentleman from California, Mr Roda for five minutes. Thank you, Mr you. Mr Chair. Thank you to all of our participants. We appreciate your commitment to the security of our country, and I’ve got a few questions. I’d like to ask one of my main concerns with the F 35 program that if left unaddressed, problems with defective F 35 spare parts will only get worse as the fleet grows. If my numbers are correct, as of February 2020 the Global F 35 fleet was about 500 aircraft, but the fleet is expected to double by 2023. The U. S alone players to purchase about 2500 F 35 from Lockheed Martin over the life of the program, as was pointed out earlier, to really replace our entire fleet. That growth may be great for Lockheed Martin’s bottom line. But if problems with the F 35 software, such as Alison Elektronik logs on spare parts are not thoroughly addressed and fixed, of course, the headaches for US pilots and maintenance crews will only grow. So Miss Hall, is it a fair assumption that the problems you identified in your June 2019 report will only get worse as the F 35 fleet expands? It is true that Unless the ready for issues bear part and he’ll issue is addressed, it will continue to perpetuate. And we’ve seen from the joint program office, you know, guidance to fly aircraft with deals. With the fleet continuing to grow, the the problems will become more pervasive unless addressed his. Now, would you agree with that assessment? I definitely agree to The F 35 programs faces a number of challenges on this sustained in front those challenges around, exacerbated by the chicken growth besides the overall fight, both here in the United States and other advise, so they have a lot of challenges that we are encouraged. They agreed with our recommendations on sustainment. Reporters are starting conviction. Fair enough, thank you. Air Force personnel also told committee staff that if not addressed, current issues with electronic logs of spare parts will likely compound as the F 35 fleet expands in additional aircraft deployed on combat missions, for example, would committee staff visited Hill Air Force Base in Utah, they were told that an F 35 squadron had received an immense amount of support when the squadron deployed in the Middle East in April 2019. This in fact was the F 35 1st time flying combat missions and everyone everyone want to see the mission succeed without a hitch. That deployment had only a handful of about 35 compared to the eventual size of the anticipated fleet, and many staff were told that would be difficult to maintain that level support. As you have 35 fleet grew in the demand from violence. Maintainers and support personnel grew along with it. Mr Armor, the most recent combat deployment of F 35 from Hill Air Force Base at beginning of June. If their deployment follows past ones, that should be home. I think in about six months, Mr Omar, can you commit today that the problems with electronic logs on spare parts will be fixed by the term that squadron comes home, Congressman, And it’ll take us more than that time to resolve these issues. But we are focused to resolve these issues. I appreciate your candor, Lieutenant General Thick, Mr. Omer. Lockheed Martin can’t meet that commitment. How will the joint Program office a Defense Department ensure our pilots are fully supported other future deployments? So, Mr Congressman, we have put language in place in our 19 and 20 r F 1 19 and 20 spares contract that requires eels on. I’m sorry. That requires parts to be or if I upon delivery. So we have set the stake in the sand relative to the delivery of those parts. We’re committed to working with the services with Lockheed Martin and with other industry best best partners to In Stan. She ate Oden as the solution to the problem problems that we continue tohave in. Alice. Andi, I firmly believe that Thean Stan shih ation of Oden is the is the intervention required to most completely address the issue with non Or if I parts. Thank you. We all know these problems have to be fixed, that they need to be fixed before the F 35 fleet is so large that problems with missing electronic logs, effective spare parts and continuing software glitch just are not so overwhelming. It cannot be fixed. And with that, I yield back. Thank you, Mr Chair. I now recognize Mr Higgins. Mr. Higgins. Thank you about your can’t crack and member. Thank you, Madam. Chair General picked Americans want air dominance worldwide. My military forces and the parents and families of our pilots. I want those pilot pilot step total confidence in their aircraft. We’re focused primarily today or talking about issues we have with Elektronik equipment logbook, the hell and the classification off missing. He’ll data in replacement parts for the up 35 platform, um, would be considered non or if I were not ready for issues absent those problems as we as we work through those issues. General pick, do you consider the F 35 to be the platform that delivers air dominance for the United States of America Worldwide? I absolutely do. Thank you. That’s what we’re looking for. And as we address the problems we’re discussing today, which I have complete confidence that Lockheed Martin is dedicated to resolve. So I turned my my question to Mr Omer. Um, things Domer are sustainment costs, but they have 35 Stanley coming down, Congressman. For every dollar of sustainment, approximately 39 cents is Lockheed Martin contributes to about 13%. 13 cents has to do with the propulsion system, and the remainder has to do with operational sustainment costs for the government. Lockheed Martin, in the interest of fine, let me just America needs to know, You know, we recognize that there are problems with with the full deployment manufacturer and perfection off this of this world class aircraft that Lockheed Martin is delivering for our nation and for freedoms purpose across the world. We need to know our sustainment costs steadily coming down and yes or no. Yes, they are. The Lockheed Martin elements of sustainment costs have come down 44% from a cost per flying hour in the last five years. There are other indicators on the or the seal the deal non or if I issues, is that being aggressive looking alive? Yes, sir, We’re aggressively engage to resolve that issue with our with our customer, right? And a part or component that’s that’s missing. He’ll data is then considered non. Or if I, my colleagues that refer to it as defective, does that part work. Will the plane fly? If that technician manually updates that congressman, there’s no issue with the part. The part is not defective. The issue is with the Elektronik file associated with the part understood would just Yes, sir, we’re clarifying for America. It’s important that we know regarding with the progress that Lockheed Martin has made in the engine. You can you clarify? According to my research, production since 2017 has shown ability to consistently deliver zero defect aircraft since 2000 sittings 70 Sir, we have ah, very strong track record, actually, multi years relative to zero defect deliveries. We are less than one defect for delivery for the last several years. That thank you for that response, sir. General Pick in his in his opening statement. And And I quote, he said, The bottom line is we need parts delivered on time with all required electronic identification markings and records right upon arrival. Um, Mr Omer, when can we get there? Are you optimistic we’re going in that direction and get in there quickly. So we’re optimistic we can get above 90% by the end of this year, as General fake alluded to. We’re going to be challenged to achieve 99% ready for issue. And we’re taking the actions necessary to support that metric and requirement by our customer. Thank you for your response, Madam Chair. Let me say that my father was a Navy pilot. World War two. I’m a veteran. And yesterday I spoke with a dear friend of mine whose son is a pilot for the Navy. And he shared the concern of parents and families across the country that their concern is that there that our pilots are flying planes, that they and all that. Thank you for holding this meeting today. I think the ranking member and I think that the witnesses were testifying today. We’re working through these issues, and I have total faith in the F 35 jet and Lockheed Martin and I you I thank the gentleman for his questions in his statement, and I now yield uh, such five minutes to congresswoman spot Jackie Spear. Thank you, Madam Chair. Thank you all for participating today. Let me ask you a question, Lieutenant General, there’s no question that the Alice system is underperformed. Correct? Uh, yes. More, this Lord. Absolutely. This Mr Elmer, is it true that it has underperformed? It’s not being our customer warfighter requirement. It is underperformed. It has been anticipated that there’s $183 million that Lockheed Martin owes The taxpayers is country for this under performance. How much time has been spent negotiating with Lockheed Martin and how, how long and how much time, Lieutenant general. So my recollection, ma’am, is that the negotiations specifically associated with the the consideration on heels began in earnest in April of this year and it continues marching. How many hours have been put into it? I don’t have that number off the top of my head, Miss Lord, I would estimate tens of hours tens of hours by the government by the government. DCM A that’s doing that for us. Thank you, Mr Armor. You continue to say you’re negotiating on something that is clearly established that you have underperformed. It’s been estimated that $183 million the United States government, the taxpayers of this country are paying 75% of your budget and your profits. I want to know when you’re gonna pay the $183 million stopped nickel and dime ing the United States government and the taxpayers. Congressman Azzawi, you’ve identified in this testimony That number has changed from 303 to 183 which is a new number to me today. So I think we have due diligence to do amongst ourselves relative to the contributors that influence the issues associated with electronic heels. We know that it is not right. So I have very little time. How much time are you going to take before we’re gonna have an answer as to whether or not you’re gonna repay the government? Congressman, we continue to negotiate in good faith across the table. Right? Let me let me more. Um, are we absolutely committed to doing, um, Odeon Oden? Yes. Absolutely. We have the dates rolling out right now. We’ll have. All right, let me ask you this question. As I calculated it, if we continue to just do work arounds over the course of the next 66 years, it would cost us $3.6 billion to just do work arounds with the existing Alice system. Are we gonna end up paying mawr for Oden than $3.6 billion? What? We are developing Oden so that we don’t have to do work around where you I understand up. And so we’re doing it for the same amount that we had budgeted just for Baseline Dallas. So how much is it going to cost time? There’s $547 million across 21 through 25 in the budget associated with Oden. I’m sorry associated with with Oden. We believe there’s also on the order of about $70 million a year between now on day 2022 that we will continue to put into Dallas who is going toe own the intellectual property U S government. No question, no question. And that will then allow us to have others fix it. So we’re not negotiating with the prime contractor over easily. $183 million when we pay Ah, half a $1,000,000,000 for every plane we purchased from them. I would like to say to Mr Omer, you are not a good actor in this. This is just one component. We already know that there are nine flaws on the F 35 that are identified as critical as priority ones that, to my knowledge, have still not been addressed. So we’re looking at one component of the F 35. We’ve had lots of problems. Of the F 35 we’ve had problems with the seats. We got problems with the oxygen system and for you not come to the table and negotiate this 100 A $3 million really aggravates me and should aggravate every taxpayer in this country. Owning this system outright should have been the case initially and we wouldn’t be in this situation. And for all those that think that somehow the F 35 is the safest playing around. I’ve got news for you. We have had problems with this plane and we continue to have problems with this plane, and we should be very concerned about these eel system not being accurate because it draws that whole issue into question without a yield back. I thank the gentle lady for her passion and knowledge on this issue, and now would like Teoh call on Congressman heist. Congressman Hice. Thank you, madam. Here. I think it’s important that we state that the end result is we want to see this program succeed. And the purpose of oversight is to ultimately get to that end on. And there are some glimpse in the road here, so to speak. We need to address those issues, but we want to thank you for your work and acknowledge the purpose of oversight is to get some of these issues resolved. So I just want that on record. Let me ask you, Miss Lord, within that context, a lot of the argument is that we need to see Lockheed write a check on Go from that perspective. Unfortunately, if that were to happen, the check just ends up going to Treasury and it does not help the program. It doesn’t help anything. Are there other forms of compensation that might be more beneficial? Absolutely. We’re now negotiating the next annual sustainment contract and the two year options. After that, we could very well look for consideration in that contract. Okay, so there are other options here, and I think those other options need to be on the table. They need to be considered. I would also. I do have another concern that I want to bring up for RG Hole and let me just say as I understand this, we’ve got about 353 of these jets that have been built out of out of about 500 since 2015 and yet ballpark of a trillion dollars has been spent on operations and sustainment. Now I just did a little math that comes to $566 million per plane per year. That is a staggering amount to me if we’re talking a trillion dollars in five years for these planes, Um, again, that’s just my math. But let’s can I get some clarification on it? So we’re gonna have to go back and help help you with the math. I don’t understand where the, uh, trillion dollars over the last five year quote came from. I don’t understand that number. The most recent life cycle cost estimate for the entirety of the program over 60 years is 1.6 trillion. So I find it hard to believe that we spent a trillion dollars in the last five where that figure is out. In fact, the selected acquisition report actually didn’t. I don’t recall seeing that number, but they did say that the amount of spending now going per year per plane is going to strange future service, operation and sustainment. I mean, so whatever the actual cost is, this is une enormously expensive program here on, So I want to know kind of how does the annual onus calls compared to other fighter jet programs in the past? So I can’t speak specifically to the onus cost of other fighters had programs. But I know that we’re aggressively targeting getting our when its costs to $25,000 per flight hour by F Y. 25. That’s our That is a that is a stretch goal that I’m work. So are we. Are we training in that direction or retraining? Teoh, Call savings. We are what we’re making. We’re making deliberate progress. To get to 25 by 25 will be a huge if you could will revise some comparison of past programs to where we are now as well as the goal. Goals are great, but I don’t know it with the trends to get to those goals. Excuse me. That should approach the fourth generation stained costs. That was the way we derived the target of $25,000 per flight hour. Okay, I would like if you could provide that to me. I would appreciate that. Miss Lord, let me go with you. And I appreciate conversations we’ve had in the past. We’ve got problems with the Alice the system transfer to the Odin system. Can you kind of walk us through some of the expectations of of Odin and how this is going toe play out. Absolutely. First of all, Odin is going to be deployed on much more modern hardware. So, for instance, the Alice system. Today, for one system you have about £891 of hardware for Odin. You’re going toe only have about £50 of hardware. So the footprints very different. And in fact, as we move towards the first deployment of Oden in September 2021 an interim step is this fault. Actually. Move Alice onto the new hardware as the first step we will own all of the data writes in the government. For Oden versus Alice, it is going to be deployed in the cloud. It is being developed using requirements in large part from the actual maintainers. So, for instance, I was on the phone yesterday with the maintenance unit, leads at five different locations, making sure that their voice had been heard by the actual team doing the coding for Oden. We also as opposed to using the old waterfall software development tack techniques. We’re using agile and def sec ops to do that. So we are in essence coding every night. I’m sorry, coating every day and testing every night. We have delivery bals from the team, the government and industry team every single day, so we can measure those deliverables and we can measure them against the baseline requirements. So a very, very different system than Alice is. Okay. Thank you, Madam Chair, I’ll yield back. But I do want to just say Teoh, Mr. Pick, I didn’t have some more questions. Particularly that I’d like to get some answers for specific to modified training. That we’re seeing it Hill and Luke Air Force Base is and why that’s happening. So I’ll get with you later on that. But thank you, Madam Chair, are you Absolutely. I thank the gentleman and now recognize representative Wasserman Schultz. Thank you, Madam Chair. I want toe ask my questions through a fiscal lens at the senior member of the Appropriations Committee because I’m deeply concerned about what I’m hearing and seeing the waste in this management of federal dollars is really paramount here. There have to be oversight mechanisms in place to keep costs in check as D o. D. And Lockheed Martin and we’re going forward on replacing Alice, which is actually held the main at 35 software system. So, Miss Lord, in 2016 the Defense Department told G a. O that the Alice Stock West system would cost an estimated $17 billion. And Geo found that estimate quote not really credible, since the department hadn’t formed a full analysis of these costs. What is the ODIs? Current estimate of how much money has been spent on Alice? We’re spending on on Oden the same amount that we’re spending on Alice. And if you give me a moment here, I have the amount over the next five years. 547 million for the next five years. But the lieutenant of what has already didn’t spend on Alex I’m not Afghani broke. Lost some car. We don’t have that right here, but we can certainly get that to you very shortly. Okay, suffice it to say, is it more than $17 million? I don’t believe so. That seems like a very large number, but we can get that for your short. Respectfully. That left the amount that that the Defense Department told Geo that the Alice software system would cost, and that was deemed not really incredible. because the department had not performed the full analysis. So my suspicion is that it’s cost more than that already, and now you’re projecting another $547 billion. Earlier this month, on July 10 the department announced it would pay Lockheed Martin 87 a half $1,000,000 to begin the development with Odin and start the transition from Alice. What will I want to ask you? A series of questions at once. And then you answer those. What will that initial work by blocking Martin include, And the 87 a half $1,000,000 contract transition from Alice is really only the beginning. You expect I would imagine Odin cost a lot more than that. You just said it would be $547 million. And since this program has had crossed significant cost overruns in the past, how do you plan to ensure that the costs of Odin is not excesses? The way Odin is being contract ID for is very different than what we’ve done in the past were actually defining the architecture and releasing app by app. We just released the first contract to Lockheed Martin in July and the work is actually being done in a government owned cloud environment. On we have total visibility toe what is delivered every day. Okay, if I can ask you to pause for a moment, my initial question was the 87 a half $1,000,000 contract transition from Alice is just the beginning. You expected to cost more than that? Go to. And what will the initial work by Lockheed Martin and, well, we have about 550 million over the next five years. And the initial work is a series of codings done by app. But I’m gonna pass to login it, Lieutenant General Thick. For more specifics, man, that’s accurate. Lockheed Martin will be coating three specific applications in four. Odin on This is the early work associate with those APS. General, do you think the D. O. D should move forward with any of the design plan without knowing how much the plan or any component of that friend cost man? My team continues to refine the cost estimate for Alice and Odin moving forward. The $547 million was money that had been pretty previously allocated to an Alice Re architecture effort. We believe that we can fully in Stan. She ate Oden over the course of the next five years within that budgetary cap. But we know that over the course of the 50 years remaining in the program that to remain viable, we will need to continue to update the software as issues were found as the program evolves and its maintenance practices change. So I do anticipate more funds will be required beyond the fighting. Dios, March 2020 report recommended that his Lord and consultation with you general develop a detailed strategy this more, um, any comments on my question about the uncertainty that is looming on on how much this is going to cost the redesign of Alice that includes the cost of redesigning the whole system? Well, we plan to have Odin deployed fully by December. I’m sorry. The question has been is more Oh, thank you. Yes, we way. Share your concern about the ability to tread a. The overall approach on the strategy for implementing over in this world is a cost associated with that. Uh oh. It is a relatively new initiatives designed replaced something that’s been around for almost two years. They’re going to be significant challenges and significant costs associated with doing that. And it’s important that it be done right and be done in. And it cost effectively. Thank you, madam. Chair, you back the balance of my time. Thank the lady for her questions and we now represent now. Recognize Representative Norman. Thank you, Madam Chairman. Inspector Hole. In your testimony, you stated the quote. While a missing ill does not mean a part is defective, it can create life and safety concerns for aircrews. Yes, you also state that quote the D. O D’s use of local guidance and and hot manual processes allow aircraft flying complete missions instead of the deal de grounding the aircraft. This suggested me that if anyone put lives at risk gives individuals at the d. O d. Not Lockheed Martin. Is this your opinion? The staff, the maintainers and the commanders at the depot had a very difficult decision. They either had to conduct a work around to get parts onto the aircraft so they could continue their training and operational missions or they had to quarantine apart and potentially impact that ability. So we although you said earlier that for two quality and safety we were aware of apart. That was a seat survival kit assembly that was the is a critical safety item that was flown on and tracked through manual processes such as a whiteboard. Thank you. General fig deals pose a safety concern or is it a risk? In your opinion? So, in my opinion, um, it the answer is it depends. There are some parts that are safety critical and our life limited. And those parts have eels, and those eels must be in place for that part to be installed on aircraft. So in those cases, yes, it is safety critical for other parts who also have eels. This parts are not safety critical. And this parts are not life limited. It’s those parts were actually looking at to try to find a way to remove the requirement for an eel so that this discussion of deal or no wheel comes off the table. Does that make sense? Can you give an example of a part that demonstrate what you’re talking about? I don’t have a specific part, number or nomenclature for you, but I know that a czar right now we’re looking at eliminating close to 600 of them across the airplane that have heels. But they’re not safety critical. Nor they life limited parts. So of the 1000 roughly 600. Okay, so it is a distinction. Yes, sir, Miss Lord. And I guess General Pickles. Well, how quickly will we get the ode ei and operational? And what is the estimated calls to develop and deploy the D I A n? So the initial delivery of the system is targeted for Sept 2021. And to develop it will be several $100 million over the next couple of years and then a couple $100 million for the few years after that to continue that deployment. Yeah, General. So we intend to declare what we call initial operational capability, which is the capability at one squadron in September of 2021 by by December of 2022. Our intent is to have Odin spread across the entire fleet with the exception of units that might not decide to transition because they’re currently deployed or otherwise. Need to continue to use the legacy Alice system. We’ll get those as soon as operational constraints allow. Thank you. The storm Look. What has Lockheed Martin done to ensure that the F 35 sustainment meets the warfighter needs? Congressman? There’s several avenues relative to sustainment. Eso we have been working on reliability, maintain ability, improvements on the platform. We’ve been working to improve the prognostic system on the on the platform. We have gone advance of contract requirements to procure material to ensure that we have the spare parts when the customer needs them. There’s a several different aspects We’ve been working to improve the Alice system. Eso There’s many different levers across the enterprise that we apply to improve sustainment performance on that 35. Well, thank you. Think like Congressman Heist mentioned that the what we need to be doing is looking at the to solve the issue. No question about the money has come up to be paid back, but also the question, in fact, that that doesn’t solve any problems. Lucky Martin does a great job of producing airplanes, and I think we’ll continue to, and we’re trying to find any problems that exist. You all trying to find a solution to him? Um, amount of time you back. Thank you, gentlemen. And now recognize a Congress person. Stupid is on line. Okay, He was online. Congressman, are you with us? We’re going to go to Congress Member Keller as we wait for Mr Steuby. Okay. Congress Member Keller. Thank you, Madam Chair. And I would like to think the Panelists for being here today or the witnesses a couple questions that I had, but I want to sort of follow up on some questions that my colleague from Georgia was asking regarding the cost per hour off flight. Our is that you say by 2025 we want to get to $25,000 per flight hour. So we consider that a stretch goal yesterday. What is the current cost? I believe current cost replied hours on the order of $35,000 later. Okay. And so there’s a schedule each year to get to that. So I mentioned in my opening comments that we’ve really We’ve pivoted the program office into lines of effort associated with five different divisions to include the air vehicle, the engines, the maintenance systems, the comment, data systems and the training systems. I’ve allocated cost savings targets to each one of those offices that they need to pursue to get to that overall cost per flying hour. Call Andi. When did we start this school or what was school established? We started to begin work on it. So that 25 by 25 goal first, I think it’s the hit the program office. About two years ago, we started to talk about it on and move the program in that direction, looking holistically across a number of initiatives from principally from a sustainment perspective but also respecting the fact that development influences sustainment costs as well, looking at those opportunities. So two years ago was it at $35,000 a flight? Our What was it when you started? It was it was higher. I don’t know the number off the top of my head, so we don’t know what we gained. Or could we find out what we gain ever two years to make sure we’re on track of him. Strangle, I realize, is a stretch goal, but I think it’s important to know where we are. Yes, so if we could get that information and appreciate it, the other thing I wanted to sort of follow up on we all know that it’s important, important program and looking what we’re doing. But I want to go back to the eels and we know there’s been reported issues, and I guess this is before Miss Lord, there’s a you know, issues associated with the electronic equipment logs and some of the data inaccuracies is due to human interface, and you know some of those items and we know that’s gonna happen no matter what you’re doing, when you’re when you’re dealing with that, are there any strategies that have been identified that might help cut down on the manual in putting of data so that there might be accuracy any kind of reducing the human interface? Absolutely. There are two different pieces to that. One is Alice has been relatively user unfriendly, a lot of training to get to be able to learn how to use it. Our latest release helps that significantly, however, in Odin, what we’re doing is making sure it’s much more automated in terms of data feeds and also prompting the user input. So those two things should be very helpful, and that that’s Experian gonna be having this totally implemented, or is there a phase in and that we can see how this is working. How soon do you anticipate being ableto to see the benefits of this? We will have the first system deployed in September of 2021. A lot of testing will go on before that point in time. And then it will be throughout the fleet by December of 2022 except for units that might be deployed on aircraft carriers, for instance, or in very remote, austere areas. Okay, Uh, also, there’s been a lot of talk about different things, but can you speak to actions? That department is taken in response to Section 1 92 of the fiscal 2020 and D A. Related to the relief from failure to deliver ready for issue spare ports? Absolutely. What we have done is put a whole team together to look at that. We’ve worked with the contractor. We’ve really gone to bet back to look at what’s the root cause? What’s the fundamental issue? And we believe Although there are many, many issues, it fundamentally comes down to Alice, and that’s part of what has really incentivized us to accelerate to the Odin transition. Okay, so when we’re talking about Alice and the issues were having have these been issues that we’ve experienced since the beginning of the implementation of the Alice program? Yes. So? So over time, we should When we when we look at moving away from that, we should not be repeating the same the same issues or no, we should not. And in fact, there actually have been large gains made with Alice. There have been multiple releases, and if you talk to the maintenance units, they will tell you that particularly 3.5 dot two that we just put out has made a lot of difference. But still, it’s not a streamlined as it could be. It’s not as easy to use. So when did we begin using Alice? If I can ask that question, Oden will start in 2021. We have an updated version off Alice that just went out about a month ago. But when did the department start using Alice back in 2012? I defer to the Prior to that. Earlier I said 2006. I’ll confirm, sir, for reference when we started out, actually operationally using. I’m just years. I’m just sort of cures out quickly weaken implement procedures. And if it’s taken us this long, I want to make sure that when we go over, though, you know when we transition over that it doesn’t take us that period of time. So that would actually have the benefit in this case with Odin of understanding what we don’t like on and using that to build what we do. So, as the team collects metrics from the users associated with the performance of Alice were using that to inform the capability needs statement associated with owed. And so we have a better idea to the point that was made previously. Of what? Of what good looks like and what we really need Odin to look like from a maintainers and a warfighters perspective. And we’re driving that train this time. We’re not leaving it up to somebody else. So in other words, we’ve we’ve learned from our past history of things we’ve done inappropriately to make sure that we don’t repeat the same failures. Yes, sir. Thank you for your back. Thank thank you very much. I now recognize Representative Talib and she is remote with us. Thank you. So great I am. Can you hear me, OK? Yes, we can. Oh, thank you, Chairwoman. Thank you for allowing me to serve my residents in the state environments on. I just want to appreciate everyone being available to us. I know, and I apologize that some of this was asked, but I think it’s really important, especially these are things that I’m hearing from my community. But Onley About two days ago, the House adopted my amendment to the N D. A focused on care for two crew members who have experienced unexplained psychological episodes while operating F 35. So, Lieutenant of Think, do you know what’s causing the psychological episodes? And again, if you had answer. But I think it’s really important for folks to understand that. And then the second question. What has Department of Defense done to protect the service members from some of these safety issues? So we’re working very closely with the services and with the medical community to understand each and every one of the physiological events that that occurs we have seen over the course of the last three years. I think I would characterize as a decrease in the occurrence of P E within the F 35 enterprise. But to say there is a common root cause between all of them. I think, um, I don’t think that we’ve come to that to that conclusion at this time. More more work to go, Miss Lord, as we know they have 35 sustained a sustainment contracts included a clause that said the government may require the contractor to replace her correct any supplies that are non conforming at the time of delivery. So Miss Lord problems with the electronic logs This is really important here can happen through the life cycle of a part. Correct? Yes. And that’s why we need to look at contract language and make sure it reflects the experience that we’ve had so that, as you point out at the time of delivery, is not the entirety of the time it goes through the eels system. We have to recognize that well, if a problem developed following delivery, would it be even be possible for Department of Defense to reject that spare part? Or would deal? Do you need to keep that part and wait for lock heads Martin personnel to fix it? We have ongoing discussions about those kinds of issues that if it’s after the point at which we initially accepted, that becomes more complicated. Well, in order to be cleared for flight at 35 policy states that an aircraft must be Elektronik Lee complete quote complete in Alice, meaning that all the electronic records from each installed at 35 part must be functioning in Alice when a part missing its Elektronik log Alice signals that the aircraft should be grounded according to Joint Program office officials quote. This is what they said. On any given day, over 50% of the F 35 fleet is flying with non R F I spare parts. Do you find that concerning Miss Lord? I have faith in our maintenance unit leaders who look at each part and determine whether the aircraft is fit to fly there, well versed in safety and would never make any safety compromises. All of that being said, I have faith in all of our maintainers. I would like our systems to be 100% correct and effective. You know what I think the American public would agree. Miss Mauer. In March, the G L reported that it is common for of 35 supply with over 20 inaccurate or missing electronic records. Even though Alice signals that the planes should be grounded, so was more briefly. How can service members be 100% sure that Alice Cygnus are due to defective Elektronik logs and not potentially dangerous issue within the aircraft? I think that I think what we’ll find is when we talk to soaps maintainers on on the flight line of work on that air. Probable fine line Is that there? I agree with Undersecretary Lord um Is there doing their level best to ensure that the plane but the plane is safe to fly? Having said that when the system that was hundreds of millions of dollars to develop and boy that’s designed to help them with the system But playing congealing on the fly isn’t trusted, that’s the problem is they’re using. These cuff records were using spreadsheets. It injects another level of risk into those decisions. And that’s where the many reasons why Alice needs to be temper well, I think it s so essentially our pilots are being forced to fly. Aircraft had neither the D, o. D. Or Lockheed Martin Convey verify 100% state do you know, like trying to clog problems and Alice, coupled with potential for human error and work around the tracking? I I simply think it’s outrageous that after spending millions of dollars and thousands of hours of manpower that our pilots are still being asked to risk their lives because of malfunctioning equipment. So in case anything here wasn’t clear. Thanks. This Now I think my chairwoman were agree. Before you have blood on your hands, I think it’s really important that you have actual lives. Human beings are behind these. Like that we have. We’re it’s our responsibility to make sure they’re safe. And so, with that, I yield um, the rest of my time. Chairwoman. Thank you so much. Thank Thank you. So very much for your important observations. I’d now like Teoh recognize Congressman Steuby. Congressman Steuby. See, hear. Or online. Great. Thank you. Mr Omer. First get like to give you the opportunity to respond. Teoh What Mrs to leave just said as a regards to the safety of the aircraft Congressman, as we mentioned the parts or not of concern it is the Elektronik file associated with the part. So we have processes in place. The maintainers have processes in place relative to part integrity. We are delivered. Each part is delivered dd 2 50 It goes through a formal inspection process. Relative to that, the aircraft also has diagnostic systems on board relative to the health of the platform itself once parts are installed, so there’s several layers of protection relative to part integrity. Can Laki Martin Arrow solved the eels functionality and data issues on its own? Or is that a broader issue? It needs to be done as an enterprise, and I think we collectively have engaged that issue relative to We need to listen to the warfighter, how they how they operate, sustain and maintain the aircraft. We need to incorporate that that information that learned information relative to the implementation within Alice and as we go forward into Odin system so it those requirements need to be defined by the user, and then industry and government needs to understand that requirement, and then we can We can work to solve that problem. We will be able to do that. The F 35 program has been referred to as a concurrent development program. How does concurrent development affect the sustainment portion of the program. So as the as the products been developed, we have also begun production. So in the early phases of the program, development was ongoing while we still produce the aircraft. Just two years ago, we received what’s called full warfighter capability with a three f capability eso as that capability was released. The fleet has grown approximately 300 aircraft in the last three years, so there’s been a lot of planning of how we plan to sustain the aircraft and now there is a lot of learning as we actually implement and sustain the airplane in the fleet. We then take and apply that learning relative to the experience that has occurred and update the system accordingly, and we seen significant improvement. I make comments in my testament in my opening remarks. The sustainment from a mission capable rate in the last two years has increased from the low fifties to the mid 70 percentile from a mission capable release, and we also see the other sustainment metrics in terms of health of supply and maintenance activities also significantly improved. So we we can measure our performance at a system level relative to how the system is improving general thick. Can you, um, how do you feel about our pilots being safe and slime that 45? So I have full faith and confidence in our maintenance group commanders and the troops that they come in and giving a ready for flight aircraft to our to our aircraft. I mentioned in my opening remarks. I have a son who’s flying for the Air Force. He doesn’t fly F 35 to his dismay, but but I know that he trusts his maintainers implicitly and explicitly to deliver to him an aircraft. It’s safe to fly. I believe that as the maintenance group commanders assess the parts that are put onto the aircraft there, making sure that any aircraft they clear to fly is safe to fly General, can you please provide to the committee an overview of how the after thoughtless performing when I played and talked to the capabilities of the aircraft is providing for the men and women in uniform? So it was 1/5 generation strike fighter platform. The F 35 relies upon stealth sensor fusion and interoperability to allow it to penetrate and persist and to punish in a way that no other air system eyes capable of doing today. I think if you talk to a war fighter who flies the F 35 Operations Aaron training, you’ll find that they’re very, very happy with the plane. They’re very, very happy with the system that they’ve got. They always want more, and we need to give them war because the threats not slowing down the threats, not stopping. We need to continue to move the program forward from a development perspective, from a production perspective and from the sustainment perspective. And what do you think can be done to take on to ensure that the F 35 is ready to take on emerging threats? So, sir, we’re, uh, deliberately moving the program into a new paradigm for development that you may have heard of referred to is continuous capability, development and delivery working to transition, a legacy departmental. Our legacy industry style of development and delivery in huge traunch is into a more incremental and agile focus development paradigm where we bring capabilities to the warfighters faster that’s gonna be important as we work our way forward on the threat continues to change our ability to be agile or not. Overuse that word to be nimble on the things that we can do with and on the platform will be critical. My time has expired. Thank you, General. For your service or country. Yeah. The chair now recognizes Congresswoman Porter. Hello, Mr Omar. Does Lucky Martin owe the government money? The federal government money congresswoman were negotiating that today with the defense Contact Contract Management Agency Relative to the issues associated with Elektronik eels. You’re negotiating today. How much does Lockheed Martin O taxpayers, Carson. We’re going through that. The figures that were provided 303 million have been reduced. 183 I heard today. So I think we’re collectively working to understand, from an accountability point of view what those numbers are. Why were the figures produced the federal government that the F 35 defective parts cost the government $300 million? Why is that about being reduced? I don’t know the specifics, man, but I do know that the government to reduce the amount you owe them or is it lucky Martin’s idea came from the government? It came from the government. Okay, Then I’ll ask Miss Lord about this in a minute. So you’re negotiating over what? Waas 300? $250 million. But it’s somehow been reduced. Teoh. About half that. How is locking doing financially? Man, we just released our quarterly earnings yesterday. So net sales, 16.2 billion net earnings, 1.6 billion in our cash, 2.2 billion. Okay, I want to make sure I have this right from that quarterly investor call which we also listen to. Profit is up 15% over this time last year. More than 3.5 billion in profit so far in 2020 10 times. That $3.5 billion in profit is 10 times what you owe the taxpayers. One recent headline. I hope you saw this good publicity for your company. One recent headline called Lockheed Martin Up Endemic Star for your ability to be earning money even as taxpayers at everyday families and small businesses struggle. So I’m not sure why the noticed that reduced. I’m gonna ask Miss Ford about that, but I also want to know more about why, given that Lucky is a pandemic stopper, Lucky is writing a letter to the white House just wrote a letter to the White House asking taxpayers to give lacking bailout funds. I’m not aware of that letter, congresswoman. So you’re telling me that it is lucky. Murray’s statement on the record that there is no request for additional money related to things like the ministry lending program or than money set aside, specifically cares for national security companies. Man, I’m not aware of a specific letter. I am aware relative to Cove It 19 and cares act relative to the disruption to aerospace and defense. I don’t know the specifics of the letter. You’re mentioning them. Did Lucky Martin request money under the Cares Act? Yes, ma’am. Why? Because of the disruption associated with Kobe 19 because of the disruption that caused you to have a profit of 15% over the prior year when we didn’t have covered 19? That doesn’t mean maybe making gobs of money is disruption for you. But I think for most everyday Americans, if they’d seen her income go up 15% this year, if they were making 10 if they were making a 30 through my $1,000,000,000 in profit in 2020 they wouldn’t call that a disruption. They call that a miracle, and they would not be coming to the government trying to take more taxpayer dollars at the same time that you are failing to pay the U. S. Taxpayers back what you owe for breach of contract with regard to the F 35 Joint Strike Force, I am unable to understand why you need this additional money when your profits are up and you breached our contracts with regard to producing defective parts. Why should the taxpayer foot the bill to help Lucky Martin at this time? Man? The disruption associated with Kobe 19 requires many different aspects. Relative Teoh, health and welfare of employees. The suppliers with use your 15% increase in profit to pay to protect your workers during Kobe. Putting the bill to help a company that’s having an uber profitability moment that is a pandemic star congresswoman. No funds have been provided relative to the cares Act that you have. Yes, just like meaning aerospace and defense companies. One wrong doesn’t make a right With that, I yield back. The gentle lady yields back and, uh, I now record recognize represented growth Hman. This whole will start with you. Your report found that is the result of receiving that Ready for issue spare parts. The Department of Defense been 303 million labor costs since 2000 and 15. If that figures Right, that’s kind of a big number. Can you explain how you arrived at that number? The 303 million is just the cost of vot labor. So it it costs about 7000 to 11,000 her issue to fix or to resolve. So that figure is just for the labour attributed to the action requests at the time. So it’s really a larger number and cost overall. Yes, it only reflects duty labor. It does not take into account the additional amount that Lockheed charged back to the government to get the parts that, you know, back ready for issue so much That was unfortunately because of the way data was not tracked regarding that we were unable to obtain that information. Okay. Are you trying to get it? Are They’re just what? I can give you the information or we requested the information from Lockheed Martin during the course of the audit, but they did not provide it. Do you have any recourse, or you just gotta tolerated. Lockheed Martin shared with our audit team that they do not track the information in a manner in which they could provide that cost to us. Heller. I guess they’re saving costs, huh? Um, in the years since report has been released, have you continued to monitor the delivery of non verify parts? Since our issue are since our report was issued, we’re currently tracking the recommendations that we made to the joint program office on the joint proud program office. Agreed with all four recommendations. And we are in the process of waiting for information to validate the actions taken. If you have any update for us, just keep waiting. Currently, we’re waiting for documentation to validate actions taken. Okay, we have a general think a question here. Uh, what’s your office than toe address? Their problem and what type of changes you think we need is to move forward So relative to the eel issue and on r f I parts, we have worked very, very closely with the field on with Lockheed Martin to put process and practice in place to to ensure that the number of parts that are arrive are. But that that requiring, er I actually have that he’ll One of these specific technical moves that that the group made was to provide what they call in advance shipping notice that in some ways significantly reduces the errors associated with manual entry of data on a part arrives at a base. So it effectively pre populates the system to allow for an easier transmittal of the eel and easier acceptance and arrival of that deal on the base. That’s a large part of the reason that we’re now in an 83% yield horrifying number. Okay, well, can I ask a similar question of Mr Omer from your perspectives Have had the issues that were raised on a narrow in on our vice spare parts in the June 2019. Inspector General report Seeing improvements? Yes, sir. They have a sui alluded to in the opening comments. Ready for issue. Effectiveness rate has increased from, I believe, 43%. 45% to about 83% the last six months. Okay, thank you very much. I feel the rest of my time gentlemen yields back and the chair recognizes a Congresswoman Miller. Thank you, madam chairman and ranking member comer and thank you all for being here today to testify before our committee. As all of my committee’s today, understand, all of my colleagues today understand the F 35 program is one of the most essential tools in our nation. Armed forces disposal. I strongly support the continued investment in the F 35 program, and I believe that it will play a major role in defending the United States and our allies for decades to come. I applaud the work that the Department of Defense, Lockheed Martin and the thousands of suppliers around the country, including those in my home state of West Virginia, have done to ensure that the F 35 program will continue to be cost efficient, mission capable and effective. I’m encouraged by the progress that has been made, especially in the last year, to reduce the cost per flight and to ensure ready for issue Parts compliance are at a much higher rate. Again, I want to thank you all for being here today for questions and showing the Committee and the American people the importance of the F 35 program. Mr. Omer, how has the Corona virus pandemic and the shutdown and the sustained economic shutdown impacted the supply chain for the F 35 program. Congresswoman, it’s It’s a bit of a mixed bag, so we have suppliers that have shut down for periods of time. Think weeks. Think a month. We’ve had suppliers that have had little impact. We’ve had suppliers that their workforce has been significantly impacted. For example, we’ve got a supplier that have reduced their workforce for periods of time from 100% down to 20 or 30%. So it has been It’s been a bit of diverse impact to our supply base. We’ve also had suppliers that provide commercial material as well as merit military hardware to the platform. And so, from a commercial aviation point of view, they have been significantly impacted from a finance health point of view. And so there’s just many different aspects of how Cove it has impacted the supply base in industry across there, not the aerospace and defense sector. Thank you, General sick. How does the mission capable rate for the F 35 fighters, compared to a year ago or even six months ago? I am the mission capable rate of the F 35 over the course. The last year has come up from, as I recall in the mid fifties to the low to mid seventies at a Zai look back at the data today. It actually seems relatively flat in the mid seventies Ato fleet level below the fleet level as we look individually at the F 35 A, which is doing a little bit better and the B in the See what you’re doing a little bit worse. We do see variations colossal by differences in the some of the systems on the aircraft, and we see the impact of different fleet sizes as well on the mission capability rates we’re taking in a wide variety of initiatives and issues that are articulated in our life cycle. Sustainment Plan to drive mission capability raising two Dr F 35 Sustainment outcomes in the right direction. Fixing Alice. There’s only one of those issues. We have 12 different lines of effort that we’re undertaking to include the establishment, the accelerated stand up of organic depose, the use of increased maintenance, maintenance authorities on the flight line and wide variety of other issues that all together will continue to move the needle in the right direction. Good. General FIC and Mr Omer, What does the future look like for the F 35 production? And how does Lockheed and your suppliers think you will be able to scale? So we are a Z. You’re aware, man. We signed the lot 12 through 14 production contracts over the course of the last fall, and we’re currently entering negotiations for the Lots 15 through 17 contracts. I can’t talk to the specific details of those negotiations, but I will tell you that overall, as you look into the service budgets and as you look into the service spend plans, we see that the numbers of aircraft in those years are are not rising as they did over the course of lots 10 through 14. But they’re a little bit more flak. Some of the flatness of the profile in those years, eyes going to challenge our ability to continue to drive price down by tail. But we’re committed to continuing to work hard with the department to establish the best value for our taxpayers and warfighters. Thank you, Mr Almer ST Go in 2017 we delivered 61 In 2018 we delivered 91. Last year we delivered 134. This year, prior to Kobe, we were on track to deliver 141 aircraft, so you can see the progression of production rate. And then we’ll actually continue that production rise as we go forward to approximately 165 aircraft and then, as general thick alluded to will see a slight decline in production quantities probably around Excuse me 155 or so in the three lots coming after that. So just kind of an overview. Within that production rate, we’ve been able to reduce the price of the airplane significantly. Eso we had we were on. We were on a plan or a trajectory to get to what we call an $80 million aircraft by a lot 14. We were able to achieve that one lot early in lot 13. And what that really what that allows is we are now able to produce and deliver 1/5 gen capability aircraft really at the price of what a fortune legacy fighter would would cost. Thank you. I yield back. Thank everybody. This is the last questioner and I want to thank our Panelists for their remarks. And I also want to commend my colleagues on both sides of the aisle for their really informed and passionate concern and for participating in this important conversation. I would like to yield to my colleague and good friend ranking member comer for his closing remarks. Well, thank you, Madam Chair. And again, I want to thank all of our witnesses who were here. Our side of the aisle here has been focused on oversight. It’s good to have a bipartisan hearing where we all share the same goals, and those goals are number one to ensure that our troops have the absolute best. At number Number two is to ensure that the taxpayers get their dollars worth and you will find no group in Congress MAWR in support of the private sector than our side of the hour. We know that parts and contracting and aircraft can be produced in the private sector significantly more significantly cheaper than the government could. Having said that, we expect the private sector to deliver on their end of the bargain and with prospective Lockheed Martin. I appreciate the fact that Lockie Barton has a significant footprint in America. Lockheed Martin employees a lot of people, and they pay excellent wages to their employees. It’s a great place to work. I appreciate that. But, Mr Olmert, we we’ve had this discussion about the issues with the eels and the issues with the F 35. And considering the significant percentage that this product IHS with your total sales for Lockheed Martin, I certainly hope that moving forward, we can get these issues resolved for the sake of our military, for the sake of our servicemen and women on for the sake of the American taxpayer. So I’m confident that we can get this resolved. But I look forward to continue discussions with with Lockheed Martin with our United States military and with the majority in this committee with that madam chair, I yield back. Well, I I really want to thank you and your staff and all of your members for joining us in a bipartisan way to work on this challenge. And I join my colleagues in saying that I, uh I I’m very pleased that Lockheed Martin has said they are dedicated to resolving these challenges and on, Mr Omer mentioned that he, or rather Lockheed Martin, had already spent over 30 million trying to correct this problem. But I want to point out that that is just a small percentage of the cost of one plane, especially when you add the 50 million that they say is needed to maintain the program yearly Now, because of the challenges, I do wanna say how pleased many of us are to learn about the Odin contract that the government will be putting forward and that the intellectual property and the Datta components will be owned by the American taxpayer and the American government. I believe this should be the standard for any military contract going forward. I consider this a national security challenge because there have been so many reports that the information has been stolen from our contractors through through hacking, including allegations that the F 35 has been compromised in the information stolen. So to have it controlled by the government to protect this information, I believe is a very good step in the right direction. We are looking forward to learning more about the Odin program and the contract and exactly how you’re going to spell it out so that these challenges do not happen in the future in order to first of all, protect the safety of our men and women in the in the Air Force, but also to protect the dollars of our taxpayers. Our next meeting will be held in September on the F 35 I am hopeful that the D. C MT. Who reported that there was 183 million owed to the American taxpayers that he had, the report said they are in negotiations. I hope by September this issue will be resolved and that we can learn more about what D. O. D. Is doing to modernize our military contracting process. It is important, first and foremost, for the safety and security of the men and women in uniform, but also the safety and security of the tax dollars in this country. I really want to thank again all of the Panelists for their life’s work for their dedication, their testimony today and, uh, I must say, I believe this is the best participation of any any hearing this year that I’ve seen on both sides of the aisle, showing deep concern and commitment to resolving this issue in a positive way for the private sector, the military, the government and the taxpayer. And I yelled back, and I think the staff on both sides of the aisle, this was a joint effort. Every single meeting was held in conjunction with both parties. Every interview, every report has been a bipartisan effort on this important issue and in closing, I want to thank our Panelists for their remarks, and I want to commend my colleagues for participating. With that and without objection, all members will have five legislative days within which to submit additional written questions for the witnesses to the chair, which will be afforded to the witnesses for their response. I ask our witnesses to please respond as promptly as you are able. This hearing is adjourned.

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