The Pentagon and Lockheed Martin have finalized a $4.7 billion deal for 43 F-35 Lightning II aircraft including new fighters for the Air Force, Marine Corps and Navy along with five planes for international partners.
The contract includes production and delivery of the aircraft, avionics, sensors and component technologies for the aircraft. The F-35 engines are procured separately through a Pentagon deal with Pratt & Whitney.
The new deal, called Low Rate Initial Production Lot 8, includes 19 F-35A airframes for the Air Force at $98 million each, six short-take-off-and-landing F-35Bs for the Marine Corps at $102 million and four carrier-launched F-35Cs for the Navy at $115 million, a Pentagon statement said. The cost estimates do not include the engine.
LRIP 8 also includes production of the first two Israeli F-35As and the first four F-35As for Japan, along with two F-35As for Norway and two F-35As for Italy. The United Kingdom will receive four F-35Bs.
“The contract also funds manufacturing-support equipment as well as ancillary mission equipment. Lockheed Martin will begin delivering LRIP 8 aircraft in early spring 2016. Once production of LRIP 8 aircraft is completed, more than 200 F-35s will be in operation by eight nations,” a statement from the Pentagon’s F-35 Joint Program Office said.
As initially reported when the terms of the deal were agreed to at the end of last month, the deal reflects an average airframe unit cost that is 3.5 percent lower than the previous agreement, LRIP 7, and a 57-percent reduction since LRIP 1.
F-35 program officials say the program has made measurable progress in recent years, following many delays and cost overruns on the program earlier in its development.
“LRIP 8 contract terms continue to eliminate the government’s exposure to risk by having Lockheed Martin cover 100 percent of any cost overruns,” the Pentagon statement said.
The Joint Strike Fighter is the Pentagon’s most expensive weapons acquisition program, estimated to cost a total of $398.6 billion for a total of 2,457 aircraft. That breaks down to an overall per-plane cost of $162 million, including research and development. The Pentagon has about 100 F-35s in the fleet so far.
Nevertheless, F-35 joint program manager Lt. Gen. Christopher Bogdan has stressed that the program has made gains lowering costs for the airplanes. He says the program’s plan is to lower the per-airplane price of the F-35 down to $80 to $85 million by 2018. This cost estimate, adjusted for “then-year” dollars, includes the airframe, mission systems and engine.
“The LRIP 8 contract contains performance-based payments, whereby the contractor will receive incremental payment as specified performance criteria are achieved along the production line until government aircraft acceptance,” an F-35 program office statement said.
As for cost underruns, the contract specifies that the government and Lockheed Martin will share the returns; 20-percent will go to the government and 80-percent will go to Lockheed, the Pentagon’s F-35 office said.
The contract also stipulates that the government and Lockheed Martin will equally share costs emerging from any changes during upcoming continued development, testing and qualification.
As of November, 115 F-35s, including test aircraft, were delivered from Lockheed Martin's production facility in Fort Worth, Texas, Pentagon officials said.
The U.S., eight Partner nations, and three Foreign Military Sales customers have announced plans to procure more than 3,200 F-35 aircraft over the life of the program.
