Lockheed ‘Disappointed’ As Pentagon Rams Through $6.1Bn Contract for F-35

Lockheed, Pentagon Spar Over F-35 Contract; Contractor expresses disappointment with contract terms (excerpt)

(Source: Wall Street Journal; published Nov. 2, 2016)

By Doug Cameron

In a surprise development, the Pentagon has broken deadlocked contract talks with Lockheed Martin after 18 months, and used a little-known legal provision to impose its own price for the 57 F-35 fighters included in Lot 9. (USN photo)

The Pentagon on Wednesday awarded Lockheed Martin Corp. a $6.1 billion deal for the next batch of F-35 fighter jets, triggering an unusual rebuke from the defense contractor over the terms and timing.

The deal, for the ninth batch of the stealthy fighters, covers 57 jets for the U.S. and some foreign air forces, with talks continuing on another contract involving more than 100 planes.

Lockheed has been in negotiations with the Pentagon for 18 months about a combined deal for 160 jets covering two years of production, and the two sides had hoped to reach agreement in early 2016.

But negotiations over price and other issues dragged on longer than expected as the Pentagon tries to cut the cost of the F-35A model used by the U.S. Air Force to around $80 million by the end of the decade, and The Wall Street Journal reported last week that the order would be split.

Lockheed said in a statement Wednesday that the new deal was imposed on it, and a spokesman said the company is considering a court appeal so that talks could be reopened. (Emphasis added—Ed.)

“We are disappointed with the decision by the Government to issue a unilateral contract action on the F-35 [latest] contract,” the company said. (end of excerpt)

Click here for the full story, on the WSJ website.

(EDITOR’S NOTE:

Neither the F-35 Joint Program Office nor Lockheed Martin had posted their statements on this contract on their websites as of Thursday morning Central European Time.
We will post them as soon as they become available.
It should be noted that this contract does not include the aircraft’s engines, which are contracted separately with Pratt & Whitney.)

(ends)

The Pentagon and Lockheed Martin At Odds Over Price of Latest F-35 Contract (excerpt)

(Source: Washington Post; published Nov 02, 2016)

By Christian Davenport

(…/…) Unable to reach an agreement on the price over the latest batch of fighter jets, the Pentagon used a rarely used provision Wednesday that allowed it to unilaterally execute the contract and set the price at its last offer.

In a statement, the Pentagon’s F-35 program office announced Wednesday that it had finalized its contract with Bethesda-based Lockheed for 57 of the next-generation, stealthy fighter jets for $6.1 billion. That deal represented a 3.7 percent price decrease from the last batch of F-35s the Pentagon purchased, and Air Force Lt. Gen. Christopher Bogdan, the program’s executive officer, hailed it as “a fair and reasonable deal.”

But 12 minutes later, Lockheed issued a statement of its own, saying the contract was not “mutually agreed upon,” and that the company was “obligated” to produce the aircraft under “previously agreed-to items.”

It said it was “disappointed” in the government’s action and said that while it would “continue to execute” on the program it would also “evaluate our options and path forward.”

That means that it is deciding whether to appeal the contract, said an industry official with knowledge of the negotiations who was not authorized to speak publicly about them. (end of excerpt)

Click here for the full story, on the Washington Post website.

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