Pentagon Gives Lockheed $1Bn Cash Advance for Unsigned F-35 Contract

WASHINGTON --- With F-35 contract negotiations stretching on, the US Defense Department in August approved about $1 billion in additional funding to reimburse Joint Strike Fighter manufacturer Lockheed Martin for costs incurred on the ninth batch of aircraft, sources with knowledge of the program said Thursday.

The move provides some financial relief to the company, which had been paying out of pocket for expenses associated with low-rate initial production (LRIP) lots 9 and 10. Last month, Lockheed’s chief financial officer, Bruce Tanner, said the company had spent nearly $1 billion of its own funds to compensate suppliers.

While the F-35 program executive office declined to confirm how much money had been obligated to the company, joint program office (JPO) spokesman Joe DellaVedova told Defense News that “with what we have provided, Lockheed will be able to continue the LRIP 9 production without bearing any undue burden.”

The JPO obligated the funding through an already existing undefinitized contract action (UCA) for the ninth batch of LRIP aircraft. It is now negotiating with Lockheed on a separate UCA that would provide some cash for LRIP 10 if a final contract is not agreed to by then, DellaVedova said.

“We appreciate the actions taken by the JPO to ensure delivery of F35s to our warfighter customer,” Lockheed spokesman Mark Johnson said in an email.

DellaVedova declined to comment on the timing and potential value of an LRIP 10 UCA. (end of excerpt)

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