The US Navy awarded Lockheed Martin more than $1 billion in logistics and sustainment services for the F-35 Lightning II programme, according to a Defense Department contract announced this week.

The cost-plus contract will cover ground maintenance and depot activation, as well as initial training for pilots and maintainers in the US Air Force, Navy, Marine Corps and foreign customers. Lockheed will also perform work on its Autonomic Logistics Information System (ALIS), the embattled network designed to manage the flow of spare parts to domestic and foreign F-35s.

In 2014, the F-35 Joint Programme Office estimated sustainment over the F-35 fleet's lifecycle would cost $891 billion. Despite its multi-billion price tag, ALIS constitutes less than 2% of the programme's total sustainment costs, according to a 2016 Government Accountability Report on the F-35. The same GAO report warned that performance issues or schedule delays related to ALIS could precipitate $20 billion to $100 billion in additional costs.

Meanwhile, Lockheed and its partners announced plans to invest in a new round of cost-cutting initiatives aimed at sustainment during the 2016 Farnborough air show. Industry partners invested $250 million for fiscal years 2018 through 2022, which could save $1 billion in sustainment costs.