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Lockheed Seeks Savings to Land 3-Year F-35 Block Buy by U.S.

PARIS -- Lockheed Martin officials said at the Paris Air Show the company is working with suppliers and engineers to find savings to land a block buy of up to 500 F-35 Joint Strike Fighters to convince U.S. and international lawmakers to approve the deal.

Lorraine Martin, Lockheed Martin's F-35 program manager, said the company is aiming for about a 10 percent savings in exchange for a three-year order of F-35 Joint Strike Fighters. The U.S. has been making orders on an annual basis.

Frank Kendall, the U.S. defense acquisition chief, said last month in Norway that the U.S. is interested in a three-year purchase of F-35s numbering about 460 aircraft starting in 2018. Canada and Denmark could join the block buy strategy and push the total order up to 500.

Marin explained that she understood the need to show savings in exchange for the three-year investment and she felt confident Lockheed Martin and its suppliers could deliver.

Kendall, who commended improvements of the F-35 program when he announced the potential block buy, will need the additional savings in order to sell it to Congress. Many lawmakers to include Senate Armed Services Committee Chairman Sen. John McCain remain critical of the $391 billion acquisition program following years of missed deadlines and cost over runs.

Kendall didn't put a figure to the discount he will need to convince Congress, but he did mention "double digit" savings in Oslo, Norway.

Martin said Monday that Lockheed Martin hopes to give the Pentagon a cost estimate by the end of the summer.

Suppliers of the F-35 program would be able to pass off savings they receive when ordering larger quantities of materials to fill a great order. Without the longer and richer contracts, the suppliers would not be able to make the same orders, defense analysts have said.

-- Michael Hoffman can be reached at Mike.Hoffman@military.com

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