Business

July 31, 2013

Principle agreement reached on two lower cost F-35 contracts

The U.S. Department of Defense and Lockheed Martin reached an agreement in principle for the next two F-35 Lightning II aircraft production contracts (Low-Rate Initial Production lots 6 and 7), which is expected to include 71 stealth fighter aircraft and continue a reduction in F-35 aircraft pricing.

The contracting effort spanned six months from proposal to settlement. A decrease in F-35 LRIP 6-7 unit costs, coupled with negotiating lower prices on a number of other smaller contracts, will allow the Department to purchase all the aircraft originally planned, including those that were in jeopardy of being cut due to sequestration budget impacts.

Cost details will be released once both contracts are finalized; however, in general, the unit prices for all three variants of the U.S. air vehicles in LRIP-6 are roughly four percent lower than the previous contract. LRIP-7 air vehicle unit prices will show an additional four percent reduction. The LRIP-7 price represents about an eight percent reduction from the LRIP-5 contract signed in December 2012.

“These two contracts represent a fair deal that is beneficial to the government and Lockheed Martin,” said Lt. Gen. Chris Bogdan, F-35 Program Executive Officer. “Improving affordability is critical to the success of this program, and by working together we were able to negotiate a lower cost F-35. There is still work to be done, but these agreements are proof the cost arrow is moving in the right direction.  We will continue to work with industry to identify areas for savings in future production contracts.”

The new contracts will also include the first F-35s for Australia, Italy, Norway, and the fourth F-35 for the United Kingdom. In addition to procuring the air vehicles, these contracts also fund manufacturing-support equipment and ancillary mission equipment.  Deliveries of 36 U.S. and partner nation aircraft in LRIP-6 will begin by mid-2014 and deliveries of 35 U.S. and partner nation aircraft in LRIP-7 will begin by mid-2015.

“At the start of these negotiations, the F-35 Joint Program Office and our F-35 team jointly committed to conduct LRIP-6 and -7 negotiations in an efficient manner that leveraged all we achieved from the LRIP-5 contract,” said Lorraine Martin, Lockheed Martin F-35 Vice President and General Manager. “Today’s agreement reflects our collective JPO/LM delivery on that commitment. We know how critical aircraft production is to meeting our services’ Initial Operational Capability dates, beginning with the Marine Corps in 2015, and we’re committed to making that happen.”

The LRIP-6 and -7 aircraft will join the 95 F-35s contracted under LRIPs 1-5. To date, 67 F-35s (including test aircraft) have been delivered from Lockheed Martin’s production facility in Fort Worth, Texas. The U.S. and eight partner nations plan to acquire more than 3,100 F-35 fighters. Israel and Japan have also announced plans to purchase the jet under Foreign Military Sales agreements.

The agreement in principle reached between the Government and Lockheed Martin are for air vehicles and do not include the propulsion systems.  The LRIP-6 engine contract is currently being negotiated between the Government and Pratt & Whitney.

 




All of this week's top headlines to your email every Friday.


 
 

 

Northrop Grumman supports U.S. Air Force Minuteman missile test launch

Northrop Grumman recently supported the successful flight testing of the U.S. Air Force’s Minuteman III intercontinental ballistic missile weapon system. The operational flight test was conducted as part of the Air Force Global Strike Command’s Force Development Evaluation Program. This program demonstrates and supports assessment of the accuracy, availability and reliability of the...
 
 
boeing-737

Boeing delivers first direct purchase 737-700 to Ruili Airlines

Boeing and Ruili Airlines Nov. 25 celebrated the arrival of the airline’s first direct purchase Next-Generation 737-700. Ruili is a newly established private airline based at Changshui International Airport in Kunming, th...
 
 
boeing-india

Boeing delivers sixth P-8I maritime patrol aircraft to India

Boeing delivered the sixth P-8I maritime patrol aircraft to India, on schedule, Nov. 24, arriving at Naval Air Station Rajali to join five others being used by the Indian Navy. The P-8I is part of a contract of eight awarded in...
 

 
boeing-SC-787

Boeing South Carolina begins final assembly of its first 787-9 Dreamliner

Boeing has started final assembly of the 787-9 Dreamliner at its South Carolina facility. The team began joining large fuselage sections of the newest 787 Nov. 22 on schedule, a proud milestone for the South Carolina team and a...
 
 
NG-people2

Northrop Grumman names communications directors for Unmanned Systems, Military Aircraft Systems

Faith Jennings Northrop Grumman has announced that industry veteran Faith Jennings, and retired Rear Adm. Vic Beck will lead Communications for its Aerospace Systems sector’s unmanned systems and military aircraft divisio...
 
 

Northrop Grumman, Air Force complete integrated baseline review

Northrop Grumman has successfully conducted the integrated baseline review of the production, deployment and initial sustainment phase for the Enhanced Polar System Control and Planning Segment. The U.S. Air Force’s EPS provides space-enabled, secure communications capabilities to polar users in support of national objectives. EPS CAPS receives telemetry and supplies configuration command...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>