Lockheed 'disappointed' with DOD's $6.1B F-35 LRIP 'definitized' contract award

By Lee Hudson / November 2, 2016 at 6:39 PM

To Lockheed Martin's chagrin, the Pentagon "definitized" a $6.1 billion deal today for the ninth lot of F-35 Joint Strike Fighters.

The low-rate initial production contract is for 57 aircraft: 42 F-35As, 13 F-35Bs and two F-35Cs.

Lockheed said it was "disappointed" in the definitized contract, according to a company statement.

"The definitized contract for LRIP 9 announced today was not a mutually agreed upon contract, it was a unilateral contract action, which obligates us to perform under standard terms and conditions, and previously agreed-to items," according to the company statement. "For the past 18 months, Lockheed Martin has negotiated in good faith consistent with our commitment to reach a fair and reasonable agreement on this critical program. We will continue to execute on the F-35 program and we will evaluate our options and path forward."

However, F-35 Program Executive Officer Lt. Gen. Christopher Bogdan issued a statement that the LRIP 9 contract represents a fair and reasonable deal for the U.S. government, the international partnership and industry.

"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," Bogdan said.

According to the Pentagon, the LRIP 9 price represents a 3.7 percent reduction from the LRIP 8 contract signed in December 2014 and an overall 58 percent price reduction since the LRIP-1 contract. In addition to savings achieved from increased quantity, the F-35's Blueprint for Affordability effort resulted in per-unit-cost reductions of approximately $1.1 million for LRIP 9 aircraft, the statement reads.

Aircraft delivery will start in the first quarter of 2017.

The LRIP 9 contract with Lockheed Martin is for air vehicles and does not include the propulsion systems. The LRIP 9 engine contract between the Pentagon and Pratt & Whitney was agreed upon in April 2016.

182335