Lockheed Martin given $3.7 billion interim payment for 50 F-35s: Pentagon (excerpt)
Lockheed and its partners have been producing the jets under a placeholder agreement known as an "undefinitized contract action."
The agreement announced on Friday allows Lockheed to continue production of the F-35 jets while it finalizes the terms of the 11th contract with the Pentagon. The contract provides funds for the procurement of 50 aircraft, comprised of one F-35B aircraft for Great Britain, one F-35A for Italy, eight F-35A aircraft for Australia, eight F-35A for the Netherlands, four F-35A for Turkey, six F-35A for Norway, and 22 F-35A aircraft for other foreign military sales customers, the Pentagon said in a statement.
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Lockheed was awarded an interim payment on 7 July of $5.6 billion to help finance construction of the 11th batch of 141 F-35 jets for the U.S. military.
The F-35 Program office said the Department of Defense would continue to negotiate the 11th low rate initial production contract with Lockheed Martin and expected an agreement by the end of 2017.
The F-35 Joint Program Office said it was “confident the final negotiated Lot 11 aircraft unit prices will be less than Lot 10.” (end of excerpt)
Click here for the full story, on the Reuters website.
(EDITOR’S NOTE: This is one of many interim payments that Lockheed has received for the 11th Low-Rate Initial Production (LRIP) batch, or lot.
The final contract is not expected to be signed before the end of the year, at which time it will be possible to know the final cost of the entire batch of airframes.
As usual, these contracts and payments to Lockheed only cover the airframe; the engines are contracted separately with Pratt & Whitney.
Lockheed Martin and the F-35 Joint Program Office continue to claim that the F-35 unit price has most recently dropped to less than $95 million for each F-35A aircraft, but the Pentagon continues to say otherwise.
In the most recent Selected Acquisition Report, released on June 26, it found that the total program cost had increased by 7% in the year to December 2016, or $27 billion.
The Program Unit Cost, obtained by dividing total procurement cost by the number of aircraft, has now increased to $140.95 million per aircraft, on average.)
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This modification provides for the procurement of 50 aircraft for non-Department of Defense participants and foreign military sales (FMS) customers comprised of:
-- one F-35B aircraft for the UK;
-- one F-35A aircraft for Italy;
-- eight F-35A aircraft for Australia;
-- eight F-35A aircraft for the Netherlands;
-- four F-35A aircraft for Turkey;
-- six F-35A aircraft for Norway; and
-- 22 F-35A aircraft for FMS customers.
In addition, this modification adds scope for mission equipment and chase maintenance activity for the above-mentioned participants, as well as the Air Force, Marine Corps, and Navy.
Work will be performed in Fort Worth, Texas (50 percent); El Segundo, California (15 percent); Warton, UK (10 percent); Cameri, Italy (6 percent); Nashua, New Hampshire (4 percent); Baltimore, Maryland (4 percent); Orlando, Florida (3 percent); San Diego, California (3 percent); Nagoya, Japan (2 percent); and other international locations (3 percent), and is expected to be completed in December 2020.
Funding in the amount of $2,180,872,005 is being obligated on this award, $118,183 of which will expire at the end of the current fiscal year.
This contract combines purchases for the Air Force ($21,849,430; 0.6 percent); Navy ($2,213,825; 0.1 percent); Marine Corps ($3,879,316; 0.1 percent); international partner nations ($2,072,714,031; 56.1 percent); and FMS countries ($1,592,405,522; 43.1 percent).
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.
(EDITOR’S NOTE: These cost figures only include the airframe, as the engines are contracted separately with Pratt & Whitney.
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