Officials to persevere with approach created as alternative to offsets despite complaints

US Joint Strike Fighter (JSF) officials will insist on carrying on a "best value" acquisition strategy as the industrial programme's nine-government partnership prepares to decide the rules for participating in three decades of production and sustainment.

"We are not going to back off best value," says Jon Schreiber, director of international programmes in the F-35 Joint Programme Office (JPO), which expects to release a draft of a model production and sustainment agreement in early September, launching a nearly two-year negotiation process. A four-month series of technical discussions on the draft will begin in late September, with formal negotiations to start next January. A final agreement needs to be in place by mid-2006, in time for the first year of low-rate initial production beginning in October 2006.

Best value has been a source of constant frustration throughout the current system development and demonstration (SDD) phase of the Lockheed Martin-led project. Created by the USA as an alternative to offsets, it mandates contract awards be based on competitive bids rather than on required workshare levels. Lockheed Martin acknowledges the best-value policy caught some of its partners off guard. Moreover, some of the partners argue that technology transfer restrictions, language barriers and tight bidding deadlines tilted many of the competitions in favour of US suppliers.

In the next phase, best value again will be the focus of the negotiations. "If you listen to the international partners it is all about industrial participation," says Schreiber.

However, the memorandum of understanding (MoU) for the production and sustainment phase will include a few changes. Strategic best-value and second- sourcing policies added during the SDD phase will be built in from the start, allowing more flexibility to direct contract awards to lagging partners. The JPO will also seek to add more non-industrial benefits during the production and sustainment phase, says Schreiber. The partners also must agree on a single MoU for the next stage, rather than the SDD approach based on a framework agreement augmented by eight separate bilateral MoUs.

But the entire process could be derailed by legislation moving through the US Congress that threatens to purge several partners from the JSF programme. An amendment to the fiscal year 2005 defence authorisation bill submitted by Republican Duncan Hunter would forbid the US Department of Defense from buying goods and services from countries that have a national offset requirement. The chairman of the Senate Armed Services Committee, Senator John Warner, opposes the bill, but the pending showdown has prompted a new wave of concern among the JSF partners.

Schreiber says Norway is still threatening to drop out of the JSF programme. While Lockheed Martin won a five-month reprieve from Norway's parliament in early June, Oslo plans to review the programme again in November as it prepares its next annual budget. However, Spain has emerged as an interested foreign military sales customer for the F-35B short take-off and vertical landing variant, says Schreiber.



Source: Flight International