Producer of the F-35 Lightning II stealth fighter Lockheed Martin has filed a lawsuit against one of its suppliers over a failure to deliver titanium components for the advanced jet.
Federal court documents indicate Lockheed filed suit against Pittsburgh-based Howmet Aerospace on 30 November, alleging a breach of contract by the metallic parts manufacturer.
Howmet produces titanium sheets, plates, bars and ingots Lockheed says are used for aircraft manufacturing. Lockheed is contracted with Howmet as a supplier to the F-35 programme under a 2018 deal with RTI Advanced Forming, a company Howmet subsequently acquired.
However, despite the agreement, Lockheed says Howmet stopped making titanium deliveries in November.
“Howmet communicated to Lockheed Martin… it would stop supplying these materials at the prices specified in the subcontract,” Lockheed alleges in its filing with the US district court for northern Texas, which includes the Fort Worth-area plant where it assembles F-35s.
At issue, according to Lockheed, is the price the two companies agreed upon for the provision of F-35 materials.
“[Howmet] instead demanded that Lockheed Martin and [other] subcontractors agree to a massive price increase in order for Howmet to continue to perform,” Lockheed claims in its court filing.
Howmet disputes the allegations, saying it takes contractual obligations seriously and “believes it has complied with those obligations”.
The company argues that Russia’s 2022 invasion of Ukraine, and subsequent economic sanctions against the major supplier of raw titanium, drove the price of titanium sponge – a processed form of titanium ore – to levels that were untenable under the terms of the 2018 contract.
“Howmet’s titanium sponge suppliers drastically increased their prices, contrary to their agreements with Howmet,” it said on 1 November.
Additionally, Howmet claims Lockheed and its other F-35 suppliers sold their scrap titanium on the open market, rather than provide the recyclable material to Howmet, as the company claims was contractually required.
Howmet says it continued to purchase titanium sponge and titanium scrap metal at market prices to supply the F-35 programme, while attempting to “reach a reasonable resolution” to the impasse.
Lockheed on 6 November declined to address Howmet’s remarks, saying it does not comment on pending litigation as a matter of practice.
However, the court filing indicates Howmet failed to make the required deliveries in November.
“Howmet has stated unequivocally that it will no longer perform its obligations under the subcontract, and will continue to breach them,” Lockheed claims.
Complicating the situation is a US law known as the Defense Production Act (DPA), which covers industrial activity considered to be vital to national security.
The F-35 programme was designated a national security priority under the DPA in 2001 by then-president George W Bush. As a consequence, all contractors involved in the programme, including Lockheed, must give F-35-related contracts priority over other business obligations.
Wilful violation of the DPA carries a criminal penalty, with punishment including the possibility of imprisonment, monetary fine or debarment from further federal contracting.
It is unclear what impact the supply interruption is having on F-35 deliveries, which are already under pressure.
Lockheed expects to deliver fewer than 100 of the fifth-generation fighters in in 2023, well below annual production capacity. The Pentagon and some overseas allies have stopped accepting new jets until Lockheed completes flight certification of the Technical Refresh-3 upgrade package.
While Lockheed continues to produce TR-3-configured F-35s at the normal rate, and expects to deliver those aircraft sometime in 2024, the company will not receive payment until acceptance by the Pentagon resumes.
Court documents indicate the F-35 programme represents Lockheed’s largest programme by value, representing 27% of total consolidated net sales in 2022.
