Contract Awards by US Department of Defense - October 9, 2018

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  In newly inked deal, F-35 price falls to $78 million a copy

  By: Valerie Insinna WASHINGTON —The Pentagon and Lockheed Martin have finalized a $34 billion deal for the next three lots of F-35 Joint Strike Fighters, setting the price of an F-35A jet below $80 million. The fresh price tag has come a year earlier than expected. The deal includes 478 F-35s for U.S. and international customers across lots 12, 13 and 14. On average, the price per aircraft will fall about 12.8 percent across all variants from Lot 11 to Lot 14, according to the Pentagon. “This is the first time the F-35 Joint Program Office will award a significant F-35 aircraft procurement in the same fiscal year as the congressional appropriation year,” Pentagon acquisition head Ellen Lord told reporters Tuesday. “We will reach a unit-recurring flyaway-cost-per-aircraft target of $80 million for a U.S. Air Force F-35A price by Lot 13, which is one lot earlier than planned — a significant milestone for the department,” she added. The F-35A conventional-takeoff-and-landing model — which is used by the U.S. Air Force and most international users — is set to decrease from a Lot 11 price of $89.2 million to $82.4 million in Lot 12; $79.2 million in Lot 13; and $77.9 million in Lot 14. The F-35B short-takeoff-and-vertical-landing model will fall to $108 million in Lot 12, $104.8 million in Lot 13 and $101.3 million in Lot 14. The F-35C variant, which can take off and land on aircraft carriers, also decreased in price, dropping to $103.1 million in Lot 12, $98.1 million in Lot 13 and $94.4 million in Lot 14. Lockheed will deliver 149 F-35s in Lot 12, 160 aircraft in Lot 13 and 169 for Lot 14. Neither Lord nor Lt. Gen. Eric Fick, the Pentagon's F-35 program executive, could explain why the size of the Lot 12 buy had dwindled from the 157 jets announced in June as part of the handshake deal to 149 jets in the definitized agreement. However, it's likely that the decrease is due to Turkey's removal from the program. After the handshake agreement was announced, a source with knowledge of the deal told Defense News that it included Turkish jets to the order of about five to 10 F-35s per lot. The Pentagon announced the contract definitization on Monday, awarding Lockheed Martin a $7 billion modification to a previous contract vehicle for the F-35. The Defense Department previously obligated funding to Lockheed through undefinitized contracts for about 255 aircraft, Fick said. The award, which comprises some Lot 12 jets as well as Lot 13 planes added by Congress in the fiscal 2019 budget, includes 114 F-35s: 48 F-35As for the U.S. Air Force 20 F-35Bs for the U.S. Marine Corps Nine F-35Cs for the U.S. Navy 12 F-35As for Norway 15 F-35As for Australia Eight F-35As and two F-35Bs for Italy Funds for obsolescent parts, software data loads, critical safety items, nonrecurring and recurring engineering, and the Joint Strike Fighter Airborne Data Emulator. “We are still left, then with about 100 aircraft to go and about another $7 billion to go associated with the work to be done for U.S. services in accordance with the [FY20 budget],” Fick said. “We don't have that budget yet. We can't make that contract award for the final aircraft until such time as we have this new statutory authority to do so.” In a statement, Lockheed's F-35 program head hailed the progress on the aircraft's price reduction. “With smart acquisition strategies, strong government-industry partnership and a relentless focus on quality and cost reduction, the F-35 enterprise has successfully reduced procurement costs of the 5th generation F-35 to equal or less than 4th generation legacy aircraft,” said Greg Ulmer, Lockheed's F-35 program vice president and general manager. https://www.defensenews.com/air/2019/10/29/in-newly-inked-deal-f-35-prices-fall-to-78-million-a-copy/