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Production deal reached for 71 additional F-35s

Lockheed Martin has tentatively agreed to contract specifics covering the next two production lots of F-35 joint strike fighter, the Pentagon’s most expensive weapon program.

The Defense Department has been pressing Lockheed Martin for months to reduce pricing for the costly stealth fighter. Contract talks spanned the last six months. 

The agreement in principle with DOD, announced on July 30, covers production of 71 new F-35 Lighting II fighters. The deal continues a reduction in F-35 pricing that was prompted by steadily rising production and unit costs. Estimates of the F-35’s unit cost exceed $200 million a copy.

The deal to reduce Low-Rate Initial Production (LRIP) unit costs will allow DOD to purchase F-35s that could have been eliminated as a result of budget sequestration cuts.  

Lockheed Martin also said details on revised production costs wouldn’t be released until LRIP 6 and 7 contracts are finalized. However, it did say Lot 6 “air vehicle unit prices” (not including engines) would be about 4 percent lower than the previous production contract signed in December 2012. Lot 7 would be 8 percent lower than the 2012 pact. 

Analysts’ estimates of the Lot 5 production contract's value ranged from $4 billion to $6 billion for 32 aircraft. 

The sixth batch of F-35s includes 36 aircraft, with deliveries beginning in mid-2014; delivery of the remaining 35 aircraft covered under the deal will begin in mid-2015, Lockheed Martin said. 

“These two contracts represent a fair deal,” Air Force Lt. Gen. Christopher Bogdan, F-35 Program Executive Officer, said in a statement.

The latest production contracts include the first F-35s for Australia, Italy and Norway, and the fourth aircraft for the U.K. The contractor added that it has so far delivered 67 of the 95 F-35s purchased under previous DOD contracts.

For now, DOD and eight partner nations plan to purchase 3,100 F-35s.

About the Author

George Leopold is a contributing editor for Defense Systems and author of Calculated Risk: The Supersonic Life and Times of Gus Grissom."Connect with him on Twitter at @gleopold1.

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