The JSF programme workshare allocation has disappointed Lockheed Martin's international partners. But is their criticism justified?

For Lockheed Martin, "when will you start treating your international JSF partners properly?" has become a question as unanswerable as "when did you stop beating your wife?". Two years after winning the $18.9 billion Joint Strike Fighter system development and demonstration (SDD) contract, as Flight International's 36-page special report reveals, the US company is facing tough challenges delivering on its promise of a truly international programme.

A majority of the nine nations that have so far joined the USA in developing the JSF are less than happy with the return to date on their combined contribution of more than $4.5 billion to SDD funding. But are their criticisms valid, or just the carping of government-cossetted industries unwilling or unable to adapt to the realities of the global aerospace marketplace? Lockheed Martin has always intended the JSF programme to be international, and has made tremendous efforts to engage the industries in the participating nations, but the company, its principal partners, the US government and the governments and industries of the other countries have not always acted in the best interests of the programme's international ambitions.

Mutual disappointment best characterises the feelings of both sides - the US primes and the international partners. On one side, Lockheed Martin had dreams of creating an international supply chain united by best-value market principles and comfortable with the pace and style of US bidding procedures. On the other, international participants wanted a quick return on investment, but immediately faced US technology-transfer barriers and a steep learning curve on competitive bidding.

It is already too late to expect significant changes in workshare ratios. The F-35's final design is scheduled to be complete by early next year, and the bulk of air vehicle contracts have been claimed. If Lockheed Martin is to be believed, the $4.5 billion international investment in the development phase will be returned to the partners over the 10-year SDD programme. But the work is unlikely to arrive at a time and of sufficient quality to satisfy all the partners.

Lockheed Martin's best-value source selection strategy is key to ensuring the F-35 is affordable - which is why the partner nations are interested in the aircraft in the first place - but the company has been surprised by how few offshore companies were ready, or willing, to compete for work on those terms.

The blame for any failure to win contracts under the best-value system must rest predominantly with the industries in the partner nations. There can be no long-term future in a global aerospace market for any industry that relies on government-brokered offsets to bring in business, rather than being internationally competitive. Among JSF partner nations, Canada and the Netherlands best illustrate the benefits of adapting to the US way of doing business.

Partner nations must also accept the blame for being slow in deciding to extend their involvement in JSF from the concept-demonstrator phase into development. The SDD contract was signed in October 2001, but most nations signed on in mid-2002. That delay cost their industries dearly, as many of the contracts had been awarded by then. This is best illustrated by the contrast in return on investment between Canada, which joined in February 2002, and Australia, which joined in October 2002, each pledging $150 million to SDD.

Anyone hearing the JSF marketing push in 2001 would be forgiven for believing the US barriers to transferring technical data and securing export licences were about to be overcome. But it would be more than a year before the global project authorisation (GPA) was approved by the US government, the final months of delay caused by Lockheed Martin's legal liability concerns.

The end result is a GPA that offers far less than the international participants were promised, and which has seldom been used in the seven months since it was secured. And while they were waiting for the GPA, foreign suppliers found it almost impossible to secure data-exchange waivers in time to respond to requests for proposals within Lockheed Martin's 30-day bidding deadline.

Perhaps the biggest disappointment of the JSF programme is the disconnect between the promise for international participation on a best-value basis and the process for allowing offshore industry a fair opportunity to compete. It would have made sense to build into the schedule an "internationalisation" phase during which countries were signed up and export licenses secured before bidding was launched. It is to be hoped that the lesson will be learned before the USA invites any more international brides to the altar of joint programmes.

Source: Flight International