PETER LA FRANCHI / WASHINGTON DC
Lockheed Martin is using restricted sourcing arrangements for F-35 Joint Strike Fighter components to ensure partner nations are guaranteed work if their industry is unable to secure a role through open competition.
US General Accounting Office (GAO) testimony to a US Congressional subcommittee hearing says the new "strategic best value sourcing" methodology will supplement the competition-based approach to JSF supplier selection.
Katherine Schinasi, GAO director of acquisition and management programmes, told the hearings that the plan was already raising concerns among partner nations that it could mark a return to prescribed workshare arrangements during the production phase.
In a related report, the GAO reveals that Lockheed Martin has struck a deal with at least one major contractor to guarantee F-35 workshare to ensure continuing political support from a nation. Lockheed Martin will also reserve some work for what it terms "heritage suppliers", with which the US company has long-standing relationships.
The report identifies neither the company nor which countries have negotiated general work value agreements.
The GAO report warns that the JSF faces major problems in balancing US technology release policy with the requirements for access by partner nations. Where highly sensitive technologies are involved, the report says, some work packages should be restricted to US companies as a means of reducing cost and schedule risks.
Schinasi said the "strategic best value sourcing" approach was intended to "allow for a limited number of work packages to be directly awarded to industry in partner nations where contract awards have to date not met expectations". The approach will use "predetermined cost goals" to try to restrict potential budget increases.
Schinasi said GAO discussions with JSF partner nations earlier this year had revealed "there are concerns that this is a departure from the competitive approach and, in fact, a move towards prescribed workshare".
The establishment of the alternative acquisition approach follows extensive criticism of the best-value-for-money competitive selection process for system development and demonstration (SDD ) phase work.
The GAO report says Lockheed Martin signed agreements with some partner governments and suppliers before SDD "to document the opportunities they would have to bid for JSF contracts, as well as the potential value of those contracts".
The report quotes the Department of Defense as saying "the agreements were necessary to secure political support in certain countries" and that Lockheed Martin has promised an international contractor predetermined work to satisfy that country's expected return on investment.
Source: Flight International
