National Security

Lockheed ‘Disappointed’ With $6 Billion F-35 Contract

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Thomas Phippen Associate Editor
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The Pentagon has a new $6.1 billion contract with Lockheed Martin Corp. for 57 new F-35 jets, but the company is not pleased with deal.

The Department of Defense has been negotiating a new contract with Lockheed for over a year, and says the new contract reduces the cost-per-jet by 3.9 percent from the last deal.

Lockheed says it “was not a mutually agreed upon contract,” Lockheed’s F-35 spokesman Mike Rein said in a statement. “We are disappointed with the decision by the Government to issue a unilateral contract action.”

The Pentagon claims that the “contract represents a fair and reasonable deal for the U.S. Government, the international partnership and industry,” according to F-35 program chief Lt. Gen. Chris Bogdan. “We will continue to negotiate in good faith with industry to keep the F-35 affordable and provide the best possible value for our customers.” (RELATED: Most Expensive Weapon System Ever Needs An Extra Half Billion Dollars)

The contract is the ninth low rate initial production (LRIP) deal for the F-35, which is the Pentagon’s way to order in small batches while the technology is tested and integrated into the service. (RELATED: Pentagon Tester Says F-35 ‘Not On A Path Toward Success’)

If Lockheed accepts the deal, it will build 42 F-35As for the Air Force, 13 F-35Bs configured for the Marine Corps, and 2 F-35Cs, which will go to Navy. Lockheed would begin delivering the first F-35s under the new contract early next year.

Nearly a quarter of Lockheed’s corporate revenue comes from the F-35 program, according to The Wall Street Journal.

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