Pentagon, Lockheed Martin reach handshake agreement on F-35 Lot 12 production contract

10 June 2019

The F-35A will have a unit price below USD80 million in Lot 12 owing to a contract signed between the Pentagon and Lockheed Martin on 10 June 2019. Source: US Air Force

The Pentagon and Lockheed Martin announced on 10 June that they reached a handshake agreement on the next batch of F-35 Lightning II Joint Strike Fighters (JSFs), according to a Lockheed Martin statement.

The USD34 billion agreement, for low rate initial production (LRIP), is for Lot 12 with options for lots 13 and 14. Lot 12 is for 157 aircraft, and lots 13-14 would include 321 aircraft, according to Lockheed Martin F-35 vice-president and general manager Greg Ulmer. The statement did not break down aircraft quantities by variant, and Lockheed Martin did not return requests for comment prior to publication.

The unit price for all three variants was reduced as well, and the F-35A unit price will fall below USD80 million, a key benchmark, in Lot 13. Ellen Lord, under-secretary of defence for acquisition and sustainment, said in a 10 June statement that this agreement achieved an estimated 8.8% savings for F-35As from Lot 11 to Lot 12.

In comparison, the F-35A price declined 5.4% from Lot 10 to Lot 11. This deal, Lord said, includes a 15% unit recurring flyway (URF) reduction across all variants from Lot 11 to Lot 14.

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