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Pentagon and Lockheed Martin reach agreement reducing F-35A cost

Air November 8, 2019

The F-35 Joint Program Office and Lockheed Martin have finalised a $34 billion agreement for the production and delivery of 478 F-35s at the lowest aircraft price during the history of the Program.

This contract includes all US, International Partners and Foreign Military Sales aircraft in Lots 12, 13 and 14.

In the agreement, the F-35 Enterprise meets and exceeds its long-stated cost reduction targets for each variant – and the F-35A unit price, including aircraft and engine, is now below $80 million in both Lot 13 and Lot 14, the F-35A unit cost represents an estimated overall 12.8 percent reduction from Lot 11 costs for the conventional landing variant, and an average of 12.7 percent savings across all three variants from Lot 11 to 14.

Air Force Lt. Gen. Eric Fick, F-35 Program Executive Officer, said: “Driving down cost is critical to the success of this program. I am excited that the F-35 Joint Program Office and Lockheed Martin have agreed on this landmark three-lot deal. This agreement achieves an average 12.7 % cost reduction across all three variants and gets us below $80 million for a USAF F-35A by Lot 13 – one lot earlier than planned. This $34 billion agreement is a truly historic milestone for the F-35 Enterprise.”

The agreement includes 291 aircraft for the US Services, 127 for F-35 International Partners, and 60 for F-35 Foreign Military Sales customers.

“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 Martin, F-35 Program vice president and general manager. “With the F-35A unit cost now below $80 million in Lot 13, we were able to exceed our long-standing cost reduction commitment one year earlier than planned.”

The sub $80 million unit recurring flyaway cost for an F-35 represents an integrated acquisition price for the 5th Generation Weapon System. With embedded sensors and targeting pods, this F-35 unit price includes items that add additional procurement and sustainment costs to legacy 4th Generation aircraft.

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Post written by: Matt Brown