C-5M upgrade long-lead items: ~$5.0B — the choice to rebuild rather than buy new (Lockheed Martin, Air Force)

1Three procurement terms stacked in one title

The title of this contract puts three terms of art in a row. Advance Procurement means securing materials ahead of the main contract. Long Lead means items that take a long time between order and delivery. LRIP means Low Rate Initial Production, the stage of building a small number before full production.

Put together, the contract buys the long-delivery materials needed for the pre-production build, ahead of the contract for the build itself.

2Why materials are bought first

Engines, large structural elements, and specialized electronic components can take a year or more to arrive after they are ordered. If the ordering starts only once the main contract is settled, everything downstream slips by the length of that lead time. So the items certain to be needed are carved out and ordered early. Advance procurement of long-lead items is a way of buying time to keep a schedule.

3What RERP chose

RERP stands for Reliability Enhancement and Re-engining Program — re-engining existing C-5 transports and raising their reliability. Designing and manufacturing a new large transport takes enormous time and money, whereas if the airframe structure still has life, replacing the powerplant and systems keeps capability at lower cost and sooner.

The roughly $5.00 billion is not the price of new aircraft; it is the price of continuing to use aircraft that already exist. Recorded outlays in this data are zero, but public outlay fields are less completely recorded for older contracts, so that does not mean no money was spent.

4Three procurement terms stacked in one title

Three terms peculiar to defence procurement stand in this title. Each is a separate concept, and together they mean buying the long-lead material required for pre-serial low-rate production ahead of the main contract.

1. 1Advance ProcurementSecuring material alone ahead of the main contract
2. 2Long LeadEngines, large structural members, specialised electronics — items taking years between order and delivery
3. 3LRIP (low-rate initial production)Building a small number before serial production, to confirm the design and the process

Waiting until the main contract is settled to start ordering delays everything by the length of the lead time. Carving out the items certain to be needed and ordering them first is a way of buying time to keep a procurement plan on schedule. RERP re-engines the existing C-5 transport to raise reliability, and about $5.00 billion is not the cost of buying new aircraft but of continuing to use those that exist.