Lockheed in US $424 million F-35 Pentagon contract


Lockheed Martin Corp is getting a $424 million US contract modification for advance purchases tied to the next batch of F-35 fighter jets, said the Pentagon, even as a much bigger deal for the aircraft themselves remains under negotiation.

The radar-evading warplane is the US military’s biggest acquisition program, projected to cost up to $382 billion for 2,457 aircraft through 2036, Reuters reports.

The add-on combines purchases for the US Navy (US $62 million; 15 percent), US Air Force (US $135.7 million; 31 percent), US Marine Corps (US $194.5 million; 46 percent), and international partners (US $32.2 million; 8 percent), the Pentagon’s daily contract digest said.

The deal, of a type called cost-plus-incentive-fee, applies to a previously awarded advance contract for sustaining the fourth batch of low-rate initial production, the announcement said.

Lockheed Martin, the Pentagon’s No. 1 supplier by sales, is continuing negotiations with the Defense Department for the underlying sale of 32 F-35s that could be worth billions of dollars, said Joseph LaMarca, a company spokesman.

Robert Stevens, Lockheed’s chief executive, told the Reuters Aerospace and Defence Summit in Washington last week that an agreement on this fourth batch could come “any day now.”

The fourth lot is to introduce a fixed price contract structure two years earlier than initially planned as part of Pentagon budget belt-tightening. Previous such contracts have guaranteed Lockheed would cover its costs plus be eligible for incentive fees.

More than US $4 billion has been invested in the F-35’s development by eight US partners: Britain, Italy, the Netherlands, Australia, Turkey, Canada, Norway and Denmark.