WASHINGTON — The Pentagon’s program to upgrade the F-35′s engines could start to expire of cash early next 12 months if a budget will not be passed in time, officials told lawmakers Tuesday.
The Engine Core Upgrade program, which seeks to present the fighter jet’s current Pratt & Whitney-made F135 engines more power, thrust and cooling ability, has enough money to last through roughly February, F-35 program executive officer Lt. Gen. Michael Schmidt said in a hearing before the House Subcommittee on Tactical Air and Land Forces.
But beyond that, “if we don’t get appropriations, I’m in a rough spot in a few months,” Schmidt said.
The Pentagon budgeted $75 million for the Engine Core Upgrade, or ECU, program for fiscal 2023; its proposed budget for fiscal 2024 would increase that to greater than $400 million.
But for the reason that recent fiscal 12 months began two and a half months ago, the Pentagon has operated under continuing resolutions that keep funding programs at 2023 levels. This has meant the ECU program has not yet received its expected budget increase and is now limited to last 12 months’s funding, Schmidt said.
“We’re alleged to be ramping up [spending in ECU] significantly this 12 months,” Schmidt said. “We’re capped at that level, after which we’re actually susceptible to it running out if we don’t have an appropriation soon.”
Pratt & Whitney declined to comment to Defense News on how one other continuing resolution would affect the engine program’s timeline or budget.
The engine core upgrade and its greater power and cooling ability is required to permit future modernizations for the F-35, particularly the upcoming improvements often called Block 4. Those upgrades will allow the jet to hold more weapons, recent sensors, and higher electronic warfare and goal recognition capabilities.
The Pentagon expects to start out issuing the primary in a series of sole-source contracts to Pratt & Whitney within the second quarter of fiscal 2024, and proceed through the top of 2031. An organization executive in December 2022 estimated the fee of ECU’s development at $2.4 billion.
Schmidt told reporters after the hearing that running out of cash could be “not good in any respect” for ECU’s ability to remain on schedule, though a precise timeline will not be set because this system is in its nascent stage.
Pratt & Whitney said in November it wants to start out delivering ECU’s increased power capabilities in 2029. But Schmidt said Tuesday he’s unsure whether that date is possible, adding that this system has not yet reached the engineering and manufacturing development phase.
“If [my director of propulsion] told me I’m going to field in October of [20]29, I’d be like: ‘You’ve got 1,000 things to prove to me before I’m signing as much as that date,’ ” Schmidt said.
Pratt & Whitney expects to complete ECU’s preliminary design in December 2023, and noted the federal government’s review will happen a few month later.
Schmidt also raised concerns in regards to the effect on Pratt & Whitney’s workforce of 600 that it assigned to the engine upgrade project. If the firm lost engineers because of an absence of funds, Schmidt said, it could be difficult to switch those employees.
“Especially within the environment that we’re in today, engineers are a premium” skill set, Schmidt said. “We’ve to be sure we keep them — not only at Pratt, I’m talking across the board. These [continuing resolutions] are a big impact to the [Defense Department]. Once we lose people … whether it’s in the federal government or in industry, getting them back is absolutely, really hard.”
Bill LaPlante, the undersecretary of defense for acquisition and sustainment, told lawmakers that the Pentagon could have to rethink its funding strategy for ECU if money starts to expire early next 12 months.
A related effort to upgrade the F-35′s power thermal management system, which might allow future improvements to the aircraft, can also be sorely in need of increased funding to start, Schmidt said. That technology uses the “bleed air” from the F-35′s engines to chill systems reminiscent of weapons and radar.
Rep. Carlos Gimenez, R-Fla., questioned the Pentagon’s decision to upgrade the F-35′s current engines as an alternative selecting a brand new, so-called adaptive engine for the jet. GE Aerospace created such an engine, the XA100, under the Adaptive Engine Transition Program, which the Pentagon seriously considered for the F-35.
“If I’m within the jet and I’m the fighter pilot, I would like the engine that takes me faster and takes me longer,” Gimenez said.
While LaPlante noted the Adaptive Engine Transition Program’s technology successfully delivered a 30% improvement in engine efficiency, and that he hopes developments proceed, the department couldn’t afford to fund an engine that it was only certain could work within the Air Force’s F-35A variant.
The Pentagon concluded GE’s engine wouldn’t fit within the Marine Corps’ F-35Bs and will not fit within the Navy’s F-35Cs, thus the department selected the F135 upgrade.
Logistics in jeopardy
The Pentagon has also paused negotiations with F-35 manufacturer Lockheed Martin on a performance-based logistics deal for the aircraft, after costs got here in higher than expected and time began to expire on extending a typical sustainment contract.
Lockheed Martin has for years pushed for such a performance-based logistics deal, or PBL, saying it could save the federal government money, quicken repairs and increase the provision of spare parts. PBL deals mean contractors are paid on expected performance outcomes, not for discrete parts and services, as occurs under a typical transactional contract.
But before the Pentagon can enter into such a contract, lawmakers in 2022 required it to first show a PBL would either lower costs or improve aircraft readiness over the present annual sustainment contract for the F-35.
This current contract, which covers 2021 to 2023 and was originally value as much as $6.6 billion, has already been prolonged through March 2024, LaPlante said, and one other extension to bring the contract through next June is within the works.
LaPlante added that the PBL proposal Lockheed submitted in June 2023, after which updated in October, didn’t hit the specified cost or performance targets. He also said tabletop exercises on sustainment within the Pacific region have shown that a PBL deal would want to give you the chance to surge capability to the region in an emergency.
In a press release to Defense News, Lockheed said it’s “disenchanted” with the Pentagon’s decision, but pledged to maintain working with the federal government and other F-35 customers to deliver the sustainment support and mission readiness they need.
“We proceed to view performance-based logistics contracting as the first approach to increase part availability, readiness and affordability for the long run because the F-35 fleet scales,” Lockheed added.
Lockheed said it continues to be talking to the Pentagon a few potential PBL contract. But in case a deal can’t be reached, the corporate noted, it’s working on an alternate deal that might take effect starting July 2024.
When asked if that is likely to be an updated version of the usual sustainment contract, Lockheed said it couldn’t offer further details, however it is working with the JPO to determine what the alternate contract solution would appear like.
In his testimony, LaPlante didn’t close the door on striking a PBL take care of Lockheed, but noted his negotiations team needed to shift focus and focus on extending the present contract to maintain sustainment activities going.
“A few month ago, it was clear we weren’t going to get a [satisfactory] cost proposal with the performance that we’d feel comfortable with,” LaPlante said. “Simply, we weren’t going to approve a PBL that didn’t perform well and didn’t get the fee savings.”
“We’ve not given up on it, but we’ve got lots of work to do there with industry,” he added.
For a PBL to work, LaPlante explained, it must last at the least five years. Finding ways to measure how well a contractor resides as much as its end of the discount may also be tricky, he noted.
“Sometimes on the system level, performance-based logistics may be very hard to do … if the contractor themselves or this system office doesn’t have control over the metric” used to guage performance, LaPlante said.
He added that the federal government plans to push for more of the F-35′s data from Lockheed Martin as a part of its PBL negotiations.
Schmidt also said the F-35 program is closing in on a milestone C decision on full-rate production on the jet, now that a series of Joint Simulation Environment tests are finished. Those trials aimed to duplicate complex, real-world scenarios the F-35 is prone to encounter in combat. The information will help LaPlante make the official decision on full-rate production, which he expects in March 2024.
Nevertheless, Lockheed is already constructing F-35s near full capability, meaning the effect of a full-rate production decision is prone to be muted.
Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.