BAE Systems has received another short-term extension to its Eurofighter Typhoon support contract for the UK Royal Air Force. But although both the company and the UK Ministry of Defence (MoD) praised the latest agreement, the government’s ambition to conclude a long-term deal has still not been realized. The MoD told AIN that it “continues to seek opportunities to identify further efficiencies and increase value for money.”

The UK has pioneered partnerships between the military and contractors for the in-service support of defense systems. BAE Systems received its first Typhoon Availability Service (TAS) contract six years ago. It is responsible for aircraft repairs, servicing and maintenance; technical support; spares management; logistics and the training of Typhoon aircrew and groundcrew. The company employs approximately 650 people at the two UK Typhoon airbases and in the Falkland Islands. The new 15-month contract is worth $168 million.

The MoD budgeted for Typhoon support of £13 billion ($19.5 billion) by the time that the combat jet goes out of service (currently predicted to be in 2030). In 2013-14, it hired the accounting consultant McKinsey to conduct a “Deep Dive” into Typhoon support costs. The result was a near-$300 million reduction, but work continues on the government’s “commitment to continued cost control and the long-term affordability and exportability of Typhoon,” according to UK National Audit Office’s Major Projects Report on defense spending.

The MoD has concluded a long-term availability contract with Rolls-Royce for the Typhoon’s Eurojet EJ200 powerplants. But it wants to replace a total of 11 legacy contracts with three more long-term contracts. In addition to the TAS with BAE Systems, these are for avionics spares and repair and for international technical support services, both with the multinational NATO Eurofighter and Tornado Management Agency (NETMA). The MoD’s two availability contracts with BAE and Rolls-Royce are on a target-cost-plus-incentive basis. The other Typhoon support contracts are fixed-price and non-competitive.

BAE said that the TAS contract has delivered tangible savings, including more than £100 million from an extension of the jet’s maintenance interval from 400 to 500 hours.