Incoming F-35 acquisition chief blasts Lockheed Martin

Maj. Gen. Christopher Bogdan describes the Pentagon's F-35 relationship with Lockheed Martin as "the worst I've ever seen."

The nominee to head the F-35 Joint Strike Fighter program fired a cannon shot across the bow of Lockheed Martin, the F-35 defense acquisition team and the military services Monday calling their relationship “the worst I’ve ever seen.”

Air Force Maj. Gen. Christopher Bogdan went on the attack in his first public comments since Defense Secretary Leon Panetta nominated him to take over as the F-35 program executive officer for Navy Vice Adm. David J. Venlet who is retiring.

He told a crowd of Air Force and defense industry officials at Air Force Association’s annual conference that the Defense Department and F-35 acquisition team has “to fundamentally change the way we do day to day business with Lockheed Martin.”

Bogdan laid bare his plans to fix the F-35 Joint Strike Fighter program — the Pentagon’s largest acquisition program — with frank language not often used by defense officials in public settings. He outlined his fears for the program while saying he sees a few “glimmers of hope,” and made it clear he will not hesitate to fire anyone he sees as “baggage.”

“I haven’t made any determination if there’s anybody wrong yet, but what I can tell you is my position is we have to fundamentally change the way we do day to day business with Lockheed Martin. And if there’s anybody not on the bus for that ride, we have to have a conversation,” Bogdan said.

Throughout Bogdan’s 30-minute speech, Lockheed Martin officials sitting in the audience uncomfortably shifted in their seats. Defense industry officials looked stunned to see an Air Force general follow up on his promise at the start of the speech “for a little bit of straight talk” on the F-35 program.

The F-35 has faced a litany of missed deadlines and spiraling costs over its eleven years in development. Bogdan called it a “great gift” when the Defense Department was allowed to restructure the program adding 30 more months of development and receiving extra funding.

F-35 program officials must operate knowing a frustrated Congress will not be willing to hand out anymore gifts to Lockheed and acquisitions leaders.

“We will not go back and ask for any more, simple as that,” Bogdan said. “This is fundamentally a fixed-price development program.”

The Air Force two-star has not yet received confirmation from the Senate to take over the F-35 program. He comes with serious acquisition chops as he’s credited with salvaging the similarly maligned tanker program and locking Boeing into a fixed price contract.

Bogdan has spent five weeks with the program since his nomination. He immediately took issue with the Pentagon’s inability to settle on a contract for the fifth production lot of aircraft noting how the Defense Department has spent nearly a year negotiating with Lockheed Martin.

“It should not take 10, 11 or 12 months to negotiate a contract with someone we’ve been doing business with for 11 years,” Bogdan said.

He called the splintered relationship a cultural problem that has festered in Lockheed Martin, the joint program office and the Pentagon. Bogdan said the poor relationship is the “biggest threat to this program today.”

“I will tell you the relationship with Lockheed Martin and our stakeholders is the worst I’ve ever seen,” Bogdan said. “We will not succeed on this program if we don’t get past that.”

He said frankly the long term sustainment strategy for the F-35 is “wrong and it needs to be changed.” Government accountants estimate the lifetime sustainment cost for the F-35’s planned fleet of 2,443 aircraft could eclipse the $1 trillion mark.

“We’ve been struggling for years and years just to get a darn airplane in the field. But if we don’t start planning for the long term strategies now, then we’re too late to the game,” Bogdan said.

Air Force Secretary Michael Donley confirmed Bogdan’s conclusion that the Pentagon is out of money when it comes to the F-35. He said the Pentagon can’t afford to get the long term strategy wrong and risk needing to scrape money from other programs to keep boosting the F-35.

“Certainly, we’ve communicated to [Lockheed] that the department is done with major restructures that involve transferring billions of dollars into the F-35 program from someplace else in the defense budget,” Donley said shortly after Bogdan’s briefing.

Bogdan said Lockheed Martin has shown “some improvement” in production, but it has not come fast enough.

“Do we expect them to be a little bit ahead of the learning curve being on their fifth lot of airplanes? Yes, but we are where we are. And what I can tell you is I am seeing some glimmers of hope at Lockheed Martin,” Bogdan said.

His early evaluation is that Lockheed is “right on the edge of getting really, really good at this” and close to delivering on the resulting production savings.

He didn’t just single out Lockheed, either. Bogdan also poked his finger at Pratt & Whitney, primary supplier of the aircraft’s engine, to yield increased production savings.

“I’m going to want see that here really soon from our partners both on the engine side and the airplane side,” he said.

Lockheed Martin spokesman Michail Rein highlighted the company’s recent success in reaching or exceeding the total number of test flights and flight hours scheduled this year.

“We remain committed to continuing our work to solve program challenges and build on the momentum and success we’ve achieved during the past couple of years,” Rein said.

F-35s have flown 826 test flights this year. Officials had expected to fly 643 flights throughout all of 2012.

Bogdan is not as impressed as some other defense officials have let on. Tallying test points, flight hours and test sorties “is not the best measure of a test program.”

“We need to rework the enterprise so we can start measuring what’s really important to test,” Bogdan said.

When the F-35 program went through its restructure, officials removed 179 aircraft from production. Critics complained asking why the Defense Department would want to buy fewer planes. Bogdan saw it as a shrewd move.

He questioned why the Pentagon would want to buy planes it will likely need to retrofit as development continues on key systems to include the software packages and the helmet.

Bogdan sees software development as a “gorilla” in the room for the Joint Strike Fighter citing the 90 to 120 days behind schedule the upgrades have fallen back the past two years.

Lockheed Martin has made “tactical improvements” to speed the program from the Block 2A software package the production line is now installing to Block 3, the block pilots plan to fly in combat. Lockheed has added new common work stations and held better regression testing.

“I have seen some glimmers of hope that that is getting better but until we have some time to see that play out for block 2B and beyond I will withhold judgment whether that is a touchdown or not,” he said.

Bogdan also held reservations over the helmet. He worried it will not be ready for the Marines in 2015 when the Corps plans to declare Initial Operational Capability on their F-35s.

“You cannot go to war and you cannot fight with this airplane unless you have a helmet that works,” Bogdan said. “Today, we have a helmet that works in a very rudimentary way.”

The helmet will fall into Bogdan’s larger strategy to apply transparency and competition in a place where it went lacking.

“We need new business strategies,” he said. “We’re looking at other business strategies and injecting competition across all of the sustainment.”