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Pentagon and Lockheed Reach Agreement to Build 375 F-35As

Lockheed Martin and the F-35 Joint Program Office (JPO) have reached a “handshake agreement” for the delivery of 375 fighters in three years.

Talks to deliver Lots 15-17 of the  F-35A’s Block 4 model had been stalled over the aircraft’s data rights in recent weeks, Reuters revealed, adding that the deadlock was broken on Monday. 

The two parties did not reveal the cost of the deal, but Reuters estimated it to be around $30 billion. 

“In the midst of continued COVID-19 impacts and decreased F-35 quantities, the F-35 enterprise was able to achieve a cost per jet lower than record-breaking inflation trends,” the JPO stated. 

“This price also includes modernized hardware needed to power Block 4 capabilities, which ensure the F-35 remains the world’s most capable aircraft in production today.”

Final Deal in Weeks

The deal’s final pricing and quantity are not locked in and could change. 

The contours of the deal could also be changed by the US Congress in the 2023 budget or by order of the buyer, Defense News wrote, citing Under Secretary of Defense for Acquisition and Sustainment William LaPlante.

Block 4 Capabilities

Citing US Air Force acquisition chief Andrew Hunter, the outlet added that the negotiations had been dragging on over escalating labor costs, inflation, and the transition to Block 4.

“We really, really need those Block 4 capabilities,” Hunter said. “And so we want to make sure that the contract accomplishes that, and it will. … So I think it’s understandable that has taken a little bit of time to come together.”

The deal includes modernized hardware to run Block 4 capabilities, supporting more “weapons, improved target recognition, and advanced electronic-warfare capabilities,” Defense News wrote, citing Lockheed.

Scaled-down Deal

Lockheed had earlier indicated an increase in unit cost over diminishing economies of scale and pandemic-related supply constraints, resulting in a scaled-back deal. The deal was projected at around 485 jets before the pandemic, according to Reuters, adding that the downsizing would have an impact on the per unit cost.

The aircraft’s initial cost was $221 million. However, it has since been lowered to $79 million as production quantities have increased. The most recent three lots in 2019 were under $80 million per aircraft.

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