Defense and they have made tremendous progress and now have an Agreement Regarding the lot 12 13 production process. This is a new milestone to the enterprise as of 35 is the largest investment and will form the backbone of the u. S. And allied inventories for the foreseeable future. Anf in the joint Program Office are laser focused on driving cost out, quality up and achieving timing delivery of our capability to our war fighters. We respect ontime delivery, we have exceeded the total aircraft quantity we delivered to the war fighter last year in revenue to 6 ontime delivery rate. A tremendous improvement from where we were last year with an average ontime delivery rate of 64 . On quality while we have made progress, there are still significant opportunities for improvement and we continue to communicate to concerns based on the data we collect. The 34 billiondollar agreement for of 35 low Rate Initial Production 12 14 of 478 f35 aircraft. 149 for lot 12, 164 lot 13 and 169 for lot 14. In support of her u. S. Military services are partner nations in a Foreign Military sales customers. This agreement represents our continued commitment to reduce f35 cost aggressively. Incentivize industry to meet required performance and deliver advanced capability to our war fighters at the best value to taxpayers. There are several notable achievements that this contract represents. First, the first time the f35 joint Program Office will award a significant f35 aircraft procurement in the same fiscal year as a congressional appropriation year. Second, we will reach a unit recurring flyaway, you are asked cost per aircraft target of 80 million for u. S. Air force f35 price by lot 13. Which is one year earlier than planned, a significant milestone for the department. The f35 enterprise will continue to stay in the lot contract award, for example in lot 14 the f35 a unit cost represent an estimated overall 12. 8 reduction from l cost. The f35 b unit cost represented overall 12. 3 reduction from 11 cost for the short takeoff. The f35 c unit cost represents an overall 13point to percent reduction from lot 11 cost for the carrier variant in lot 11. With an average of 12. 7 savings across all three variants from lot 11 to 14. These represent some of the largest achieve savings lot over a lot for the program heard this contract will allow u. S. Men and women in uniform alongside the f35 partners to maintain a competitive advantage with unique unmatched fifth generation capabilities. Understandably there will be questions today on the Program Deviation that i told you about earlier this month due to delays in integrating the f35 into the joint stimulation and test of structure. The fifth will provide more detail on that shortly. I want to reiterate. I have full faith and confidence in the f35 program and our ability to deliver f35, capability anywhere in the world. Make no mistake, the f35 is the worlds most advanced lethal and operable aircraft ever developed. I want to think congress for their continued support of this program. I regularly meet with members and professional staff to provide updates and answer questions so their leadership is lo appreciated. As the f35 continues to grow were also growing our sustainment capabilities to ensure these aircraft are ready and capable. Due to the efforts across the f35 enterprise led by you tenant general, they coded operational unit Mission Capability performance increased from 55 in october 2018 to 73 in september 2019. While were making progress, were not where we need to be. We have industry commitment on accelerating improvement and sustainment. Our focus is on provedd f35 and driving towards the Service Affordability goals. Too that end we are placing particular focus on accelerating our depot repair capability, accelerating fleet modification and improving logistics Information System that are known as alice functionality responsiveness. As of last month, over 440 aircraft have been delivered at 17 bases worldwide with over 850 pilots and 8200 maintainers. On turkey, and f35, there has been no change to return turkey to the f35 program. The s400 air Defense System which is incompatible with f35 remains in turkey. As i said previously, turkey makes nearly 1000 of the f35 and will continue to do so until turkeys of 35 supply chain responsible these transfer at the end ofsp march 2020. They are responsible for that supply chain so i will defer any questions to them. In closing, i want to reiterate how regrettable it is that we are again under a continuing resolution. Crs cause great damage to the military readiness and disruptor ability to modernize our Strategic Forces including nuclear for the future. I strongly urge congress to pass a different appropriation and authorization bill now so we can move forward with the many important programs needed to ensure our readiness and deter our adversaries. We at dod are grateful for our Congress Passing to your budget agreement that provides the budgetary certainties that it needs to implement the National Defense strategy. With that, ill let Lieutenant General make a statement in a be happy to answerll questions. Take you. And thank you ladies and gentle men for your interest in the f35 program. The agreement we announced yesterday is a significant one for a number of ways not the least in size and overall value. 170 aircraft and 34 billion. This includes aircraft for all three u. S. Services for international partners, and are for military sales customers totaling 351 of 35 as, 86f30 ladies, and 41 f35 cs. I imprint to be here today to grab onto represent the f35 enterprise and to share my thoughts on the state of the program. Our initial Development Efforts are coming to a closeit as this trend initial test proceeds. As you are aware, we have delayed milestone c and full rate production decision until such time as joint simulation environment is available to support the director of Operational Test and a value since assessment of the program. We look forward to this assessment and are working hard with the Systems Command to fully integrate the f35 into the synthetic environment. This integration is not only critical to the completion but it will become increasingly important to future modernization efforts on the f35. Too that end, while the program has reached initial operation capability for all three u. S. Services, the united kingdom, italy, japan, f and israel is about to do so again in more ways, we understand the need to continue the modernization to ensure it stays relevant over time. Our mandate to deliver the next increment of capabilities to the program known as block four on a very tight timeline drove us to look at modernizing the air system and a new way. A way strongly influenced by developmental active standard industry today. It continues to enter capability was born with this need and to date we have for releases using this methodology. These releases have focused rrprimarily on minor deficiencis and resulted in the delivery of new capabilities, most notably the lifesaving capability inherent in the automatic ground system. Through close work with Operational Requirements and test communities, the c2 d2 process will make sure and continue to deliver increments of capability over time to ensure the war fighting customers stay ahead of the threat well into the future. They capture the status of yesterdays Production Award including the savings and we realize were fightersav and taxpayers, my joint Program Office and negotiating teams worked tirelessly on this deal and im proud of the work that they have done under excruciating pressure. With this award received from a productions perspective the most dramatic rate increases in a production line are behind us. Lot 12 is 149 aircraft represent only a 6 increase over lot 11 quantity of 141 and the deltas for lot 14 and 13 are similar. You will recall the lot 11 quantity with a full 50 higher in lot ten which was itself 55 greater than lot nine. This traumatic rate increase is challenging for the supply chain but the comparatively minor changes a lot 12 and 14 should give up breathing room as we move forward. The stabilization will help with the Timely Delivery of parts and production line and spares and repairs to the field. Speaking of the field, our hyper progress enter product has reached full Operational Capability and currently sustaining a fleet of more than 440 aircraft and eight nations around the world including the u. S. , norway, israel, italy, the uk, australia, korea and japan and operating around the world both the short and afloat. The netherlands will join this elite group with the first aircraft arousal ceremony happening later this week. From a performance perspective while we fell short of the secretary of defense 80 Mission Capability mandate we have definitely moved and continue to move the needle. Increasing the Mission Capability rate from operational fleet from 55 in october of 2018 to 73 in september of 2019. Within theso same timeframe they saw sustained mc in fmc, Mission Capable of full Mission Capable levels well above 80 and even into the 90s. Are we finished, no. Are we making progress, yes. Much but not all of the progress is due to the actions implemented as a result publication and execution of a new life cycle t sustainment pln in early 2019. Unlike many other plans like it, they tend to be forgotten as soon as the sign is executable driving deliberate and nearterm actions across ten different lines of effort including accelerating fleet modification, Maintenance Plan changes, to the field, accelerating supply chain capability and capacity and enhancing our reliability improvement plan. All those actions are ongoing today. On top of these actions, i need to acknowledge that most of the progress is also a tribunal to the significant work over error hundred airmen marines and so sailors operating this in the field today. Theyre doing what humans, marines and sailors do. They make things work. We are extremely grateful. We will work closely with them to realize the whole potential of the f35. Were at a strategic Inflection Point in the program moving from initial development and fielding to modernization, high rate production and sustainment. As we partner to deliver costeffective awardwinning capabilities, were changing our relationships with these Industry Partners as well. Our contracts are changes turning away from cost focus incentives and future incentive structures that for our Development Contracts motivate the transition to able processes are mentioneded previously. Our production contracts including this 112 14 Incentive Fees and performance Incentive Fees that drive costreduction is supply level and improve production. To ensure the war fighters have the system they need when they need it. We look for ways to improve the business relationships including multiple year end multiyear for production and performance based logistics. We are working today with martin to define the parameters that meter were fighters operational demand, taxpayer best value demand and Enterprises Demand for greater organic involvement. In closing let me reiterate im proud to be here of the f35 enterprise, im excited to be your Program Executive officer and im looking forward to your question. A couple weeks ago you announced there was a delay of production system, someone that involved in the f35 program will ask what is the pentagon putting on i contractors 470 moe planes when theyre delaying the combat testing whether its effective and suitable intermediateta year. Yesterday was a 7 billiondollar contract, was that the first one in the 30 billion or last november when you put 6 billion in joints of simulation environment, with the earliest itll be up and running . First of all, the department has full confidence in the planes that are flying today, the air force and the marine corps have deployed squadrons and theyre very happy with the capability. The criteria in terms of getting out of iot any is to test against threat that we will see ten years from now and the density we would see ten years from now. We can only do that in a syntheticha environment. And we are very confident in the configuration of the aircraft and we are working on the nuances of working against these advanced threats. The public should be extremely comfortable with aircraft that is out there today the full rate production decision it codifies the final capability of the aircraft when we get to the testing. Thats relative to your question on the 7 billion. This is part of a series and allegations in the execution of this effort. As you look back to what was previously announced 255 aircraft with 11 billiondollar obligation economic order and had been worked onn previously and under the contract action. Are you associated with ongoing work with the u. S. And partners in lot 12 and 13 . The announcement added 114 aircraft to the total in an obligation of 7 billion for work to begin on those aircraft. In addition to that we also obligated and additional 10 billion that was not included in the announcement because the announcement was already made for the initiation. So the second 10 billion is for the initial work done on the 2551st aircraft. We are left with 100 aircraft to go in about another 7 billion to go associated with the work to be done for u. S. Services in accordance with the pb 20. We dont have that budget yet and we cannot make that a contract with the final aircraft until we have the Statutory Authority to do. Relative to the jsc, its a synthetic environment that allows us to fully assess the capability of the f35. Again a wide range of air and surface direct and operation threat and the director of testing a valuation in his role in assessing the program looks at the current threat as well as a threat ten years into the future. In getting into an environment like the jsc is critical to assess them against that. The integration of the f35 as was mentioned previously is taking longer than anticipated the validation and verification will be in this fall in midnovember am expecting this to begin in the continue through the spring, we believe the be ready for testing in march april timeframe and should conclude in june or july. Could you explain to a person why a brandnew aircraft is not above 80 Mission Capable because all the parts are new and weve had this conversation before because cannibalization of parts of order of aircraft. Let me give that a shot and handed over to eric, traditionally we are trying to get capability fielded and then we are building a sustainment tail behind that. Right now as eric mentioned, we have ramped up significantly throughout integrative supply chain and what we have found, we did not have the capacity for repairables. We are lagging in some of those repair parts. We are particularly having issues and three areas, one is canopies, to his engine fuel, and wing tip lenses. So those are the areas in the Parts Holding us back. So we believe we are making very Good Progress moving forward. You did really good. I would just identify by saying as aircraft fielded, you take them off and replace them with another, and my remarks i talked about the acceleration and ramp from perspective and how they process aircraft due to production line and all they are now producing parts and dramatically increasing rate and they must also produce tears even above those rates. In makingic that ramp from a purchase perspective has been challenging. One of our initiatives is to push it to the field and purchases on contracts that we can get ready for them to install. And also action both within the existing supply chain and stand up capacity to repair the parts that they, so there available to the field. Thats been a huge part of this effort to drive higher Mission Capability to make sure they have the parts on the shelf when theyre needed. I have a numbers question, if i heard you right, i think you said 149 aircraft, if so i think the original number when he did the handshake deal of 157 aircraft, whats the reason for the difference, the turkey aircraft and secondly, youre saying theres an average 8 reduction for 12 14 variance in the deal it was said there would be a drop of 15 from lot 11 to lot 14. Is not just a nonapple topples comparison and can you put it in context for me. I cannot address the 157 number, all have to go back into time and figure out where that number came from. Ill circle back to you on that. Relative to the discrepancy between the 2. 8 and roughly 50 production that you have heard, their vehicle reduction from lot 11 through lot 14 for the a models was 14. 4 in the d model 15. 3 and for the c model 14. 6 , when adding the engine the reduction cost is a tribunal and reduced at a much lower plate. The engine returned on 3 between lot 11 and lot 15. When you some those together it brings overall reduction t t int at the flyaway level across to airframe engines to 12 13 . Doctor of their forces he things in five years with the airplane of the next technological generation to the air force, can you explain how for the air force and for the over services the f35 ball might be modified to accommodate the airplanes and how that will be squared against the f15. We are stain on the course of the f35 i will say the air force team are doing innovative and interesting things in terms of developing new fighter aircraft, we look at the total capability versus the adversary and we find a place for the f35, f15 and the new century ser