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.


 
 

 

Headlines January 23, 2015

News: Two Marines identified in deadly California helo crash - Two Marine Corps officers killed when their helicopter crashed during a training exercise in the Southern California desert were remembered Jan. 25 as talented pilots. Greek F-16 crashes in Spain during NATO exercise - Ten people died Jan. 26 after a Greek air force F-16 jet crashed...
 
 

News Briefs January 26, 2015

Navy wants to increase use of sonar-emitting buoys The U.S. Navy is seeking permits to expand sonar and other training exercises off the Pacific Coast, a proposal raising concerns from animal advocates who say that more sonar-emitting buoys would harm whales. The Navy now wants to deploy up to 720 sonobuoys about 12 miles off...
 
 
Air National Guard photograph by SSgt. Annie Edwards

ANG conducts air refueling training with NATO allies in Germany

Air National Guard photograph by SSgt. Annie Edwards A NATO E-3A AWACS aircraft approaches a Utah Air National Guard KC-135R Stratotanker for air refueling during a training flight over Germany on Jan. 13, 2015. Nearly 30 airme...
 

 
Air Force photograph by SrA. Armando A. Schwier-Morales

Ramstein Airmen train with French air force

Air Force photograph by SrA. Armando A. Schwier-Morales Two U.S. Air Force pilots and a French air force navigator discuss the route to the drop zone during a simulated low-level drop Jan. 21, 2015, at Orleans – Bricy Air...
 
 

Marines receive first F-35C Lightning II carrier variant

The first F-35C Lightning II, carrier variant, for the U.S. Marine Corps touched-down on the flight line at Eglin Air Force Base, Fla., Jan. 13, from the Lockheed Martin plant in Fort Worth, Texas, to begin training in support of carrier-based operations. U.S. Marine Lt. Col. J.T. Ryan, Marine Fighter Attack Squadron 501 detachment commander...
 
 

VA announces single regional framework under MyVA initiative

The Department of Veterans Affairs announced Jan. 26 that it is taking the first steps under the MyVA initiative to realign its many organizational maps into one map with five regions to better serve Veterans. The new regions under the MyVA alignment will allow VA to begin the process of integrating disparate organizational boundaries into...
 




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>