WASHINGTON — Lockheed Martin and the U.S. Department of Defense have reached a handshake agreement on the next lot of F-35 joint strike fighters, an agreement that for the first time includes options for customers to purchase additional aircraft over the next few years.
In a statement, Pentagon acquisition head Ellen Lord called the agreement, worth $34 billion over lots 12, 13 and 14 for 478 aircraft, a “historic milestone.”
The agreement includes 157 jets in lot 12, and comes with an estimated 8.8 percent Unit Recurring Flyaway cost savings from the previous lot. While the Pentagon did not provide costs per aircraft in its news release, that would amount to about $81 million per F-35A conventional takeoff and landing model compared to $89.2 million for an F-35A in lot 11.
Lord estimated that the cost will drop around 15 percent from lot 11 to lot 14 across all variants, which could peg an A model at around $76 million.
“This framework estimates the delivery of an F-35A for less than $80M in Lot 13, one year earlier than planned," Lord said. "This agreement symbolizes my commitment to aggressively reduce F-35 cost, incentivize Industry to meet required performance, and to deliver the greatest capabilities to our warfighters at the best value to our taxpayers.”
The price of the F-35B short takeoff and landing variant and F-35C carrier variant also dropped in lot 12, said Greg Ulmer, Lockheed Martin’s F-35 head.
“With smart acquisition strategies, strong government-industry partnership and a relentless focus on 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,” he said in a statement. “The handshake agreement, once finalized, will represent the largest F-35 production contract and the lowest aircraft prices in program history.”
News of the deal was first reported by Reuters.
This story will be updated
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.
Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.