Lockheed Martin, F-35 Joint Program Office Sign Multi-Lot Production Deal

October 29, 2019 2:04 PM
Marines assigned to the ‘Flying Leathernecks’ of Marine Fighter Squadron (VMFA) 122 perform maintenance on an F-35B Lightning II on the flight deck of the amphibious assault ship USS America (LHA-6) on Oct. 3, 2019. US Navy Photo

Lockheed Martin and the F-35 Lightning II Joint Program Office inked a long-awaited $34-billion deal to build the next three batches of 478 stealthy fighters.

Lockheed Martin and the JPO reached what was called a “handshake deal” to produce the next three batches, called Lots 12, 13 and 14, in June. The deal would, for the first time, bring the per-unit flyaway cost of the F-35A standard take-off and landing variant to below $80 million, according to a release from Lockheed Martin.

“Driving down cost is critical to the success of this program. I am excited that the F-35 Joint Program Office and Lockheed Martin have agreed on this landmark three-lot deal. This agreement achieves an average 12.7 percent cost reduction across all three variants and gets us below $80 million for a USAF F-35A by Lot 13 – one lot earlier than planned,” Air Force Lt. Gen. Eric Fick, the F-35 Program Executive Officer, said in a statement. “This $34 billion agreement is a truly historic milestone for the F-35 Enterprise.”

In Lot 13, the F-35B short take-off/vertical landing variants used by the Marine Corps will cost $104.8 million per aircraft, and the F-35C carrier variant used by the Navy and Marine Corps will cost $98.1 million per aircraft in Lot 13, according to Lockheed Martin.

The number of F-35 aircraft delivered by Lockheed Martin will more than double by the time the 478 aircraft covered by this three-lot deal are produced. Of the aircraft covered by the deal, 291 are for the U.S. military, 127 are for F-35 international partners in the program and 60 aircraft are for F-35 Foreign Military Sales customers.

“With smart acquisition strategies, strong government-industry partnership and a relentless focus on quality and cost reduction, the F-35 enterprise has successfully reduced procurement costs of the 5th Generation F-35 to equal or less than 4th generation legacy aircraft,” Greg Ulmer, the Lockheed Martin F-35 Program vice president and general manager, said in a statement. “With the F-35A unit cost now below $80 million in Lot 13, we were able to exceed our long-standing cost reduction commitment one year earlier than planned.”

While the Joint Program Office and Lockheed Martin agreed on a multi-lot deal, the Pentagon is not quite ready to sign off on moving the F-35 program into a full-rate production, which would allow for awarding multi-year F-35 contracts.

F-35 aircraft are performing well in real-world operations. However, the military’s ability to integrate F-35s into a Department of Defense simulation system hit some snags, Ellen Lord, undersecretary of defense for acquisition and sustainment, said during a media briefing on Oct. 18. The full-rate production decision had been expected to occur in December, but Lord said her determination could be delayed as much as 13 months, coming as late as January 2021.

Ben Werner

Ben Werner

Ben Werner is a staff writer for USNI News. He has worked as a freelance writer in Busan, South Korea, and as a staff writer covering education and publicly traded companies for The Virginian-Pilot in Norfolk, Va., The State newspaper in Columbia, S.C., Savannah Morning News in Savannah, Ga., and Baltimore Business Journal. He earned a bachelor’s degree from the University of Maryland and a master’s degree from New York University.

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