F-35 Incentives Plan

F-35 contractors have put up some $170 million to invest in cost-reducing projects on the strike fighter under a plan that gives them high incentive to make the projects succeed, and quickly, said Lt. Gen. Christopher Bogdan, F-35 program executive officer, in a Sept. 15 interview. He told Air Force Magazine that the contractors can get all their money back by sharing the savings with the services. “The sooner these things pay off, the sooner they get their money back,” and after that, the faster they will generate higher profits, said Bogdan. “So it is ‘win-win,’ for us and for them,” he said. If the initiatives don’t work out, the contractors don’t get reimbursed, “so they have lots of incentive to make it work quicker,” said Bogdan. He added that “the beauty of it” for the program is that improvements negotiated in a given lot are “booked in that lot,” and the government gets the savings right away, and from there on, whether the improvement works out or not.