A Lockheed exec tells BI what's needed to fix the F-35's biggest problems

• Lockheed Martin's F-35 is widely recognized as a top fighter jet.
• However, the program has been troubled by cost and readiness concerns for years.
• The makers of this fifth-generation aircraft told BI their thoughts on how to address these.

Lockheed Martin's F-35 Lightning II Joint Strike Fighter is a combat-proven fifth-generation jet, but the supersonic stealth plane has consistently faced cost and readiness concerns.

Business Insider recently visited the factory where these advanced aircraft are produced and asked the makers about the challenges facing this program and potential changes that might help reduce sustainability costs and improve mission capability rates.

The lifetime F-35 program costs are now expected to top $2 trillion, and sustainability costs are rising. Yet the Government Accountability Office assessed last year that the F-35 isn't hitting mission-capable rates and hasn't for years. These are key criticisms the fighter has faced.

A Lockheed representative said that addressing these issues comes down to reliably investing in parts and maintenance. Edward Smith, the company's F-35 business development director, said that "to maintain a fleet at any given readiness level, you have to fully fund your supply system."

The Joint Program Office previously told BI that readiness tends to improve with a healthy supply of parts for maintenance.

Smith said that the F-35 has historically been underfunded in terms of the supply purchased for the aircraft and depot repair capacity, adding that it's important to get the supply of sustainment parts at a level that matches the jet's readiness needs.

"If the parts are available and on the shelf," he said, then "we can get to the readiness rates that are desired by all of our customers that are out there."

And for overall costs, he said that as more F-35s roll off the production line and the supply pool of parts grows, the aircraft will become increasingly cheaper to operate. Over the last decade, explained Smith, it has seen a 50% reduction in cost-per-flight-hour, in some cases making it as expensive to fly as fourth-generation jets being made today but delivering more capability.

Smith said that the average mission capability rates for the F-35, which is the percentage of time it can perform one mission, tend to be between the high 50s and high 60s.

These figures are higher on combat deployments; the US military averages an 80% mission capability rate for the F-35 on every combat deployment it's done, and for the Israelis, since the October 7, 2023, Hamas attacks, the number is almost 90%, he said.

"It exactly matches our funding level for parts. Traditionally, we've been funded at about 70% availability, and that's if nothing broke," Smith said. "If you don't fund supply, you cannot have the readiness," he added.

A combat-proven fifth-gen fighter

The F-35 is the US military's second fifth-generation fighter jet after the air-superiority F-22 Raptor. The jet comes in three variants designed for conventional runway and ship-based operations and is flown by the Air Force, Marine Corps, and Navy.

The US military has flown all three F-35 variants — the A, B, and C variants — in strike missions against terror groups in Iraq, Afghanistan, and Yemen.

The Israel Defense Forces were the first to fly the jet into battle. They operate their own version (the F-35I) and have flown it into combat, battling Syrian missile batteries, shooting down drones, and striking Iranian military sites.

The jets, however, were built for a higher level of warfare, which would demand the advantages offered by its all-aspect stealth, sensor suite, networked systems, and combat power, all capabilities required for combating next-gen aircraft and high-end surface-to-air threats.

The F-35 was developed and manufactured as part of a multinational partnership, and over 1,110 jets have been delivered. Many US allies operate the aircraft, with more countries looking to acquire this plane in the future. It's considered a cornerstone for US airpower.

Improving the program

The F-35 program relies on a shared contractor and government-based maintenance system. How contracts are issued may affect how readiness issues are fixed. To increase efficiency, "we need to drive to more performance-based sustainment contracts," Smith said.

He said sustainment for the F-35 is contracted on an annual basis. He called this process inefficient and "very costly," arguing that it doesn't allow the industry to plan and invest strategically because it's uncertain what the next annual contract could look like.

"There's definitely room to increase efficiency in how we contract for these systems and put the onus on industry to perform," he said.

"That's what we continue to strive for is those performance-based contracts that we not only get as a prime, but also with our suppliers," Smith said, noting this gives them "long-term certainty and forecasting so we can invest to improve the metrics for this airplane."

Performance-based contracting is centered on the results achieved from a specific program in terms of requirements rather than the cost or time needed to ultimately achieve them.

Michael Bohnert, a licensed engineer at the RAND Corporation, said that longer-term contracts tend to be more efficient than annual contracts for long-term acquisition because they provide the industry an opportunity to plan.

Performance-based contracts "can be an effective tool," he told BI, "but they require a deeper understanding of the systems to set adequate performance goals with accurate pricing."

The F-35 JPO, which leads the aircraft's life-cycle program management, acknowledged that annualized sustainment contracts are not ideal for reducing costs and improving readiness. However, it said bad performance contracts can arguably be worse.

"Key considerations for performance contracts include funding stability for sustainment, confidence in data for forecasting and cost modeling, and contract structures that balance risk between industry and government," a JPO spokesperson told BI.

"Performance contracts must align with warfighter needs, potentially requiring a mix of contracting strategies," the office said.

A Lockheed Martin spokesperson told BI that the company is committed to working with the JPO "on delivering mission-essential and effective sustainment support for the F-35 program now and in the future."

The spokesperson said pursuing a performance-based contracting strategy is a decision made by the Pentagon. "I would defer you to them for further comment. We support any model that can increase readiness and reduce cost for our customer," they said.