Agreement to buy 478 F-35 Sets F-35A Unit Price Below $80 Million Target

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

This contract includes all U.S., International Partners,

and Foreign Military Sales aircraft in low-rate initial procurement (LRIP) Lots 12, 13, and 14. Follow-on orders are expected to run under full-rate production. For the first time, the cost of an F-35 fighter jet and its engine drops below US$80 million in Lot 13 and 14.

The sub $80 million per unit for 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.

According to Lockheed Martin, the agreement reflects the F-35 Enterprise goal to meet its long-stated cost reduction targets for each variant. “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 percent 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,” said Air Force Lt. Gen. Eric Fick, F-35 Program Executive Officer. “This $34 billion agreement is a truly historic milestone for the F-35 Enterprise.”

Under the agreement, the Pentagon awarded a US$7 billion modification to the firm-fixed-price, fixed-price incentive firm target cost-reimbursable contract F-35 procurement contract reflecting the procurement of 114 aircraft under Lot-12 buy, for the Air Force, Marine Corps, Navy, and Foreign customers. Specifically, the modification procures 48 F-35A aircraft for the Air Force, 20 F-35B aircraft for the Marine Corps, nine F-35C aircraft for the Navy, 12 F-35A aircraft for the government of Norway, 15 F-35A aircraft for the government of Australia, and eight F-35A and two F-35B aircraft for the government of Italy. The above U.S. aircraft quantities are inclusive of fiscal 2019 (Lot 13) plus up aircraft.

The total multi-year buying agreement includes 291 aircraft for the U.S. Services, 127 for F-35 International Partners, and 60 for F-35 Foreign Military Sales customers.

Price details include:

VariantLot 12Lot 13Lot 14%Reduction from Lot 11*F-35A$82.4M$108.0M$103.1M12.8%F-35B$79.2M$104.8M$98.1M12.3%F-35C$77.9M$101.3M$94.4M13.2%* Final prices for F-35 variants following adjustments for Congressional plus-ups and other contractual settlements are as follows: F-35A – $89.3M; F-35B – $115.5M; and $108.8M

“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.”

More than 450 F-35 aircraft are operating now from 19 bases around the globe. Eight nations have F-35s operating from a base on their home soil, and seven Services have declared Initial Operating Capability (IOC). More than 910 pilots and 8,350 maintainers have been trained, and the F-35 fleet has surpassed more than 220,000 cumulative flight hours.

The F-35 program includes 1,500 direct suppliers, 1,400 of them are in the USA, and 100 located internationally.

Source: defence-update.com

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