US Defense Department, Lockheed Wrap Up Discussions on Ninth Lot of F-35 Jets

The Pentagon said on Wednesday that after 14 months of negotiations on the more than $6.1 billion deal, the U.S. Department of Defense and Lockheed Martin Corp ended talks on their ninth contract for F-35 fighter jets.

The unilateral agreement on the deal for 57 of the new warplanes will provide profit margin certainty to Lockheed and its partners. They have been producing the jet under a placeholder arrangement known as an “undefinitized contract action”.

People acquainted with the contract discussions who spoke under condition of anonymity said the tenth production contract, which is a 94-plane deal, was still under negotiation.

Lockheed said in a statement that the contract was not a mutually agreed upon contract. It was a unilateral contract action, which requires them to perform under standard terms and conditions, and earlier agreed-to items. Moreover, they said that they are disheartened with the decision by the government to declare a unilateral contract action.

However, people familiar with the purchasing process said that the unilateral resolution was uncommon.

The prior lot of 43 planes, lot 8, had an average unit price of $108 million per plane. Planes in lot 9 are about $107 million per plane, 3.7 percent lower. Hence, it is the lowest price per jet thus far.

The F-35 is the Pentagon’s most expensive arms program. The U.S. Department of Defense looks to spend $391 billion to develop the plane. It plans to buy 2,443 of the stealthy, supersonic warplanes, in the coming decades.

The ninth batch of jets includes 42 F-35 A-model jets for the U.S. Air Force, Japan, Israel and Norway; and 13 F-35 B-model jets, which can manage short takeoffs and vertical landings, for the Marine Corps and the British navy. This is in addition to two carrier-variant F-35C jets for the U.S. Navy.

Lockheed, and its key partners including Northrop Grumman, Pratt & Whitney and BAE Systems, have been building and developing F-35s for the U.S. military and 10 allies.

The price of the F-35A conventional takeoff and landing version of the jet would fall to under $100 million per plane in the 10th low-rate production batch, Jeff Babione, Lockheed’s F-35 program manager, had earlier said.

 

The post US Defense Department, Lockheed Wrap Up Discussions on Ninth Lot of F-35 Jets appeared first on Newsline.