Lawmakers press Lockheed to pay back Pentagon for F-35 issues

Lawmakers on Wednesday pressed F-35 maker Lockheed Martin to pay the Pentagon back millions of dollars in potentially lost labor after the firm delivered parts unable to be installed on the fighter jet.  

But Greg Ulmer, Lockheed’s vice president for the F-35 program, would not commit to a figure to compensate the Defense Department for defective electronic equipment logs (EELs), saying it wasn’t entirely the company’s fault.

“It’s a complex problem. … It’s not all associated with Lockheed Martin performance. There’s many aspects relative to [parts that are] not ready for issue,” Ulmer told the House Oversight and Reform Committee.

“I’m also committed to meeting with the Defense Contracts Agency as well as the [F-35 program office] to sit down and reconcile the concerns and adjudicate the cost appropriately,” he added.

The Defense Contract Management Agency (DCMA) has estimated that the Pentagon paid at least $183 million in labor costs since 2015 to fix the logs on more than 15,000 parts that Lockheed delivered. The logs, which are used to register a part in the plane’s logistics system, contain data on the equipment’s use and age and can be used by the military to indicate when a part needs to be bought or upgraded.

“That’s $183 million that the American taxpayers were forced to pay because Lockheed Martin failed to meet the requirements of its contract,” the committee’s chairwoman, Carolyn Maloney (D-N.Y.), said in her opening remarks.

Ulmer said the logs contain “quite a bit of sophisticated engineering information; it doesn’t simply just track a part” and that in working with customers “there are elements that can corrupt this data.”

He added that Lockheed has “seen significant improvement … up to 83 percent ready for issue.”

Maloney, however, wasn’t convinced, telling Ulmer that “it’s got to be 100 percent.”

“Every time a pilot gets in those planes and flies up into the sky, they’re risking their life. … And a contract is a contract. And the contract says you will deliver a plane, which you’ve done beautifully. It’s a beautiful plane. But it also says that the material that is needed to fly that plane has to be delivered too,” she added.

Lawmakers spent most of the hearing questioning F-35 program leaders about the electronic equipment logs, pressing them on fixes and progress.

In particular, they pressed Ulmer about how Lockheed continues to receive money from Pentagon contracts even with unsolved F-35 technical problems. 

“With all this profit, why is Lockheed failing to fulfill the contract and deliver EELs intact and on time?” Rep. James Comer (R-Ky.) asked Ulmer.

The Pentagon’s F-35 joint program office head, Lt. Gen. Eric Fick, said during the hearing that Lockheed and the Defense Department are currently negotiating an agreement that will allow it to gain back some labor expenses but have not settled on a final dollar amount the company will pay. 

And Ulmer said Lockheed has already spent $30 million to fix the problem and has sat for multiple negotiations with the DCMA to come up with a figure. 

“We’ve had six direct meetings with the DCMA since April 2. We were meeting with the DCMA prior to April 2 to work on this issue together,” he said. “We have more to go … and you have our resolve to fix this problem.”