Instead, the F-35 Joint Program Office (JPO) would award work to industry in partner nations on a best-value basis, and Australian companies would have to compete on their merits with the rest. In addition, the contracts to be let initially only covered the Strategic Design and Development (SDD) phase of the programme and any work won was not guaranteed beyond that phase.
This methodology aims to drive cost down in what is by any measure a hugely expensive defence program. Not surprisingly, it has drawn a lot of criticism from members in all partner nations: the United States, United Kingdom, Canada, Denmark, Italy, The Netherlands, Norway, Turkey and Australia.
Happily, Australian industry has won more than $140 million in work over the SDD period, and as the program shifts into Low Rate Initial Production (LRIP) more work is will be on offer. Naturally, there will always be room for more work. Lockheed Martin estimates further Industrial Participation opportunities worth over $12 billion are possible.
Australia has yet to formally order the Conventional Take Off and Landing (CTOL) F-35A variant, but the Defence White Paper flagged a requirement for at least 72 and possibly up to 100 aircraft, in keeping with the original projections. Lockheed Martin says it expects to build at least 3173 F-35s for the member countries, and any sales outside of this would automatically add value to the contracts.
The production contracts will therefore be initially based upon this production figure, but any further orders via Foreign Military Sales will obviously realise further work. Furthermore, the contracts reflected in the figures above do not include work for either of the two engine manufacturers, or opportunities in the Global Sustainment Program.
Lockheed Martin's Australia & Canada F-35 Program Manager Bob Price briefed media at the Avalon Air Show on Australia's share of industrial participation to that point. Price says the company reviews opportunities and updates Australian industry with opportunities every six months. As at March 2009 180 projects had been allocated to industry in this country to date and a further 120 opportunities had been identified. Of the $11 billion of opportunity over the 30-plus years of production identified at the last meeting in October 2008, over $750,000 of further work had come to light, and the true figure is now in the region of $12 billion.