Back to news

January 25, 2021 | International, Aerospace

Next F-35 Contracts Under Negotiation, Deal Expected by Late September

Jan. 22, 2021 | By John A. Tirpak

The F-35 Joint Program Office, Lockheed Martin, and Pratt & Whitney are negotiating prices for the 15th through 17th lots of Lightning II fighters and engines, aiming for a deal by the end of September.

The contracting strategy is to negotiate a “base year” contract for Lot 15, with “two single-year options (Lots 16 and 17),” a JPO spokeswoman said. While the air vehicles are under negotiation, the “propulsion Lot 15-17 proposal is currently in technical evaluation,” the spokeswoman said. Although Lockheed quotes prices publicly for F-35s with engines included, the government negotiates with the engine maker separately. The Lightning II is powered by Pratt's F135 turbofan.

The strategy likely buys time for the F-35 to finally exit engineering and manufacturing development and be declared ready for full-rate production, a milestone postponed last month for the third time by former Pentagon acquisition and sustainment chief Ellen Lord.

The Lot 15-17 contracts will also mark the first major deals for the F135 engine conducted with Pratt under the ownership of Raytheon Technologies, which formally took over the engine maker in April 2020. Pratt was previously owned by United Technologies.

The program office expects to conclude both the air vehicle and propulsion talks within fiscal 2021, the spokeswoman said. Lot 15 air vehicles “are planned to be fully funded and awarded in FY'21,” but the Lot 16 and 17 options would be exercised in fiscal year 2022 and 2023, respectively, “when funding becomes available.”

The Lots 15-17 contracts were originally expected to include a multi-year “block buy” agreement including the U.S. However, by law, the U.S. cannot enter into a multiyear procurement arrangement for a weapon system until it has passed Milestone C, or full-rate production. The F-35 most recently was supposed to clear Milestone C in March, but Lord postponed that declaration until further notice, due to ongoing challenges integrating the F-35 with the Pentagon's Joint Simulation Environment—a wargaming system that helps Pentagon leaders decide on optimum force sizes for various weapon platforms. Lord's move leaves it up to the Biden administration to declare whether and when the F-35 is ready for full-rate production.

When the Lot 12-14 contract was announced in October 2019, Lord said the F-35 had completed 90 percent of the tasks necessary to pass Milestone C.

U.S. partners in the F-35 program are already participating in a “block buy” arrangement with Lockheed Martin.

The $34 billion October 2019 contract, which covered Lots 12-14, achieved Lockheed and the JPO's longstanding goal of getting the unit cost of the F-35A below $80 million a copy. That contract, the largest yet for the fighter, included 478 aircraft; 291 for U.S. military services and 127 for foreign users. It also marked a 12.8 percent drop in the price of the Air Force version of the Lightning II over Lot 11. Engine costs had only declined 3.5 percent versus the previous lot.

Lots 15-17 will likely involve a slightly larger number of aircraft.

Industry officials said they expect smaller cost reductions in the F-35 from now on, as the production line is nearly at capacity and peak efficiency. The 2019 contract was the “big bang” deal, said one, in which Lockheed “pushed it” to get the unit cost below $80 million. At that price, the fifth-generation F-35 costs less than fourth-generation types like the F-15EX, but its operating cost remains significantly higher.

Lockheed missed its delivery quota of F-35s in 2020 by about 20 airplanes, due to delays incurred by the COVID-19 pandemic. Michele Evans, former Lockheed aeronautics vice president, said in the fall the company expects to gradually make up those missed deliveries by around 2023, noting it did not want to disrupt the production enterprise for a brief surge to get back to par.

https://www.airforcemag.com/next-f-35-contracts-under-negotiation-deal-expected-by-late-september

On the same subject

  • Contract Awards by US Department of Defense - February 18, 2020

    February 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - February 18, 2020

    NAVY East Coast Repair & Fabrication LLC,* Norfolk, Virginia (N00024-20-D-4411; Lot 1) (N00024-20-D-4413; Lot 2); and Colonna's Shipyard Inc.,* Norfolk, Virginia (N00024-20-D-4412; Lot 1) (N00024-20-D-4414; Lot 2), are awarded firm-fixed-price, indefinite-delivery/indefinite-quantity (IDIQ) contracts for ship repair, maintenance and modernization of non-nuclear surface ships assigned to or visiting Norfolk, Virginia, via the rolling admissions solicitation process. Awards reflecting the final option period under Lot 1 have a maximum ceiling value of $250,000,000; awards reflecting the final option period under Lot 2 have a maximum ceiling value of $100,000,000. At the time of the IDIQ awards, each awardee under both Lot 1 and Lot 2 will receive the $10,000 minimum guarantee via delivery order. These multiple award IDIQ contracts are for repair, maintenance and modernization of non-nuclear Navy surface ships undergoing Chief of Naval Operations-scheduled maintenance availabilities in Norfolk, Virginia. These availabilities can be docking or non-docking availabilities and will be procured via competitive delivery order solicitations amongst the IDIQ contract holder. Each awardee of a delivery order for an availability will provide the facilities and human resources capable of completing, coordinating and integrating multiple areas of ship maintenance, repair and modernization. Work will be performed in Norfolk, Virginia, and is expected to be completed by February 2021. Fiscal 2020 operations and maintenance (Navy) funding in the amount of $10,000 per delivery order (four delivery orders total; $40,000 total) will be obligated at time of each IDIQ award and will expire at the end of the current fiscal year. These contracts were competitively procured via the Federal Business Opportunities website, with two offers received in response to solicitation N00024-19-R-4412. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. Rolls-Royce Corp., Indianapolis, Indiana, is awarded a $62,400,402 modification (P00016) to a previously awarded firm-fixed-price contract (N00019-17-C-0081). This modification exercises an option to procure 29 AE1107C engines for Navy V-22 aircraft. Work will be performed in Indianapolis, Indiana, and is expected to be completed December 2021. Fiscal 2019 aircraft procurement (Navy) funds in the amount of $21,517,380; and fiscal 2020 aircraft procurement (Navy) funds in the amount of $40,883,022 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. General Atomics, San Diego, California, is awarded a $25,200,747 cost-plus-fixed-fee delivery order (N00019-20-F-0521) against a previously issued basic ordering agreement (N00019-16-G-0006). This delivery order procures Electromagnetic Aircraft Launch System (EMALS) Depot Planning Phase II efforts, including depot level logistics support analysis, engineering support for logistics, supportability analysis, maintenance planning, reliability maintenance, technical manual development and engineering support as it directly correlates to depot planning for the USS Gerald Ford (CVN 78) and USS John F. Kennedy (CVN 79). Additional efforts include those required to complete the Depot Planning EMALS logistics products necessary in support of an in-service EMALS. Work will be performed in San Diego, California (99.9%); and Tupelo, Mississippi (0.1%), and is expected to be completed February 2022. Fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $4,787,000 will be obligated at time of award, none of which will expire at the end of the fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Boston Ship Repair LLC, Boston, Massachusetts, is awarded a $14,358,866 firm-fixed-price contract (N32205-20-C-4006) for a 90-calendar day shipyard availability for the overhaul dry-docking availability of USNS John Lenthall (T-AO 189). The $14,358,866 consists of the amounts listed in the following areas: category "A" work item cost, additional government requirement, other direct costs and the general and administrative costs. Work will include furnish general services, hull steel replacement, tank painting, stability testing, degaussing conduit removal from tanks and inserting bulkheads, diesel engine repair, structural steel gauging surveys, flight deck non-skid, flight deck safety net inspection and weight testing, steel replacement and underway replenishment systems repairs. The contract includes options, which, if exercised, would bring the total contract value to $16,867,699. Funds will be obligated Feb. 18, 2020. Work will be performed in Philadelphia, Pennsylvania, and is expected to begin on March 9, 2020, and is expected to be completed by June 6, 2020. Fiscal 2020 Navy working capital funds in the amount of $14,358,866 excluding options, are obligated at the time of the award and will expire at the end of the current fiscal year. This contract was competitively procured, with proposals solicited via the Federal Business Opportunities website and two offers were received. The Navy Military Sealift Command, Norfolk, Virginia, is the contracting activity. General Atomics, Electromagnetics Systems Group, San Diego, California, is awarded a $10,364,470 modification (P00047) to a previously awarded firm-fixed-price contract (N00019-14-C-0037). This modification procures hardware and installation support services for the System Functional Demonstrator and Shipset Control Lab sites for the Electromagnetic Aircraft Launch System. Work will be performed in San Diego, California (95%); and Tupelo, Mississippi (5%), and is expected to be completed December 2021. Fiscal 2018 shipbuilding and conversion (Navy) funds in the amount of $10,364,470 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. DEFENSE LOGISTICS AGENCY Coastal Pacific Food Distributors Inc., Stockton, California, has been awarded a maximum $246,750,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution. This was a competitive acquisition with two responses received. This is a five-year contract with no option periods. Locations of performance are California and Washington state, with a Feb. 15, 2025, performance completion date. Using military service is Navy. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3259). Sysco Seattle Inc., Kent, Washington, has been awarded a maximum $176,250,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution. This was a competitive acquisition with two responses received. This is a five-year contract with no option periods. Location of performance is Washington state, with a Feb. 15, 2025, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3260). Science Applications International Corp., Fairfield, New Jersey, has been awarded a maximum $90,000,000 firm-fixed-price contract for facilities maintenance, repair and operations items. This was a sole-source acquisition using justification 10 U.S. Code 2304(c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is an 18-month bridge contract with no option periods. Location of performance is the Southwest Region Zone 2 of the U.S., with an Aug. 18, 2021, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriation is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E3-20-D-0007). SupplyCore Inc.,* Rockford, Illinois, has been awarded a maximum $90,000,000 firm-fixed-price contract for facilities maintenance, repair and operations items. This was a sole-source acquisition using justification 10 U.S. Code 2304(c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is an 18-month bridge contract with no option periods. Location of performance is the Southwest Region Zone 1 of the U.S., with an Aug. 18, 2021, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriate is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E3-20-D-0006). ARMY 313 Industries Inc.,* Warren, Michigan (W56HZV-20-D-L001); Mettle Craft Manufacturing LLC,* Sterling Heights, Michigan (W56HZV-20-D-L002); Milton Manufacturing Inc.,* Detroit, Michigan (W56HZV-20-D-L003); and Rose-A-Lee Technologies Inc.,* Sterling Heights, Michigan (W56HZV-20-D-L004), will compete for each order of the $19,000,000 firm-fixed-price contract to provide surge support for build-to-print component requirements through fabrication and manufacturing for the Combat Capabilities Development Command Ground Vehicle System Center. Bids were solicited via the internet with four received. Work locations and funding will be determined with each order, with an estimated completion date of Feb. 15, 2025. U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. Canco LLC,* Canton, Ohio, was awarded a $10,050,000 firm-fixed-price contract to replace an existing fire station. Bids were solicited via the internet with seven received. Work will be performed in Mansfield, Ohio, with an estimated completion date of Dec. 31, 2021. Fiscal 2019 -Air National Guard military construction funds in the amount of $10,050,000 were obligated at the time of the award. The United States Property and Fiscal Office, Columbus, Ohio, is the contracting activity (W50S8R-20-C-0003). U.S. TRANSPORTATION COMMAND Vane Line Bunkering Inc., Baltimore, Maryland, has been awarded contract modification P00040 on contract HTC711-13-C-W015 in the amount of $11,516,430. This modification provides continued transportation of bulk jet fuel and marine diesel fuel by barge for the Defense Logistics Agency-Energy in the Atlantic Region. Work will be performed in ports and points along the inland waterways and East Coast locations in the Atlantic Region. Period of performance is March 1, 2020, to Aug. 31, 2020. Fiscal 2020 defense working capital funds were obligated at award. This modification brings the total cumulative face value of the contract to $178,740,305 from $167,223,875. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Illinois, is the contracting activity. DEFENSE ADVANCED RESEARCH PROJECTS AGENCY Two Six Labs LLC,* Arlington, Virginia, has been awarded a $7,970,711 modification (P00008) to previously awarded contract HR0011-18-C-0134 for additional in-scope work under a Defense Advanced Research Projects Agency research project. Work will be performed in Arlington, Virginia, with an expected completion date of September 2022. Fiscal 2020 research, development, test and evaluation funding in the amount of $850,108 is being obligated at time of award. The Defense Advanced Research Projects Agency, Arlington, Virginia, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2086591/source/GovDelivery/

  • US Air Force awards Boeing first contract for fleet of 26 E-7 aircraft

    March 1, 2023 | International, Aerospace

    US Air Force awards Boeing first contract for fleet of 26 E-7 aircraft

    Boeing's contract will be worth up to $1.2 billion, as the service begins work on a fleet to replace the iconic E-3 Sentry.

  • Lockheed Martin And Thales Australia Finalize Teaming Agreement To Develop Sovereign Weapons Manufacturing Capabilities In Australia

    April 26, 2021 | International, Land

    Lockheed Martin And Thales Australia Finalize Teaming Agreement To Develop Sovereign Weapons Manufacturing Capabilities In Australia

    The agreement will see experienced strategic industry partners in Lockheed Martin and Thales Australia cooperate in the design, development and production of Lockheed Martin’s Long Range Anti-Ship Missile – Surface...

All news