Lockheed Gets $7.8 Billion F-35 Order to Finish A $30 Billion Mega-Contract
It was the final installment in the mega-contract for a total of 398 F-35s. The latest batch of the world’s costliest weapons system includes 77 planes for the U.S. Air Force, Navy and Marines as well as lesser numbers for allies Italy, Japan, the UK, Finland, the Netherlands, Belgium, Poland and Denmark.
(Bloomberg) -- Lockheed Martin Corp. received a $7.8 billion award Friday for 126 of its F-35s, completing a $30 billion contract to supply the fighter jets to the U.S. military and allies, the Pentagon announced.
It was the final installment in the mega-contract for a total of 398 F-35s. The latest batch of the world’s costliest weapons system includes 77 planes for the U.S. Air Force, Navy and Marines as well as lesser numbers for allies Italy, Japan, the UK, Finland, the Netherlands, Belgium, Poland and Denmark.
Funding was delayed until Congress approved the final version of the government spending bill for this fiscal year in December. Friday’s award is the latest F-35 contract in what’s eventually projected to be a $412 billion acquisition program for about 3,000 planes for the US and other countries.
The award, the 17th production contract, culminates months of intense negotiations for three production lots under which the Defense Department whittled down the number of jets it ordered. Before negotiations began, the Defense Department had said it might buy as many as 485 of the jets.
Boosting Lockheed
On the positive side for Lockheed, the F-35’s international profile has never been higher. Global interest has soared because of Russia’s invasion of Ukraine and increased tensions with China. South Korea has indicated it wants more of the jets, and two US Air Force F-35 units have flown deterrence patrols in Europe.
The F-35 accounted for 26% of Lockheed’s $15.1 billion first-quarter sales. As of March 30, 899 jets had been delivered to the US and overseas customers, Lockheed said.
The contract award is a boost for Lockheed, whose aerospace division has been struggling with supplier snarls and rising costs in the aftermath of the Covid-19 pandemic.
Twelve military services worldwide have declared the F-35 operational, and the Pentagon and Bethesda, Maryland-based Lockheed have reduced a laundry list of unresolved problems.
The number of “open deficiency reports” now stands at 831, the F-35 program office said, down from 845 in September 2021. Earlier last year the total stood at 864, including eight “Category 1” defects deemed the most serious to pilot safety, flight operations or both.
On the negative side, cost overruns on a project to upgrade cockpit computer hardware have risen an additional $236 million. The projected cost of the project is now almost double the original $712 million contract.
Delivery of the first F-35 with upgraded hardware that’s crucial for the fighter jet’s advanced capabilities may be delayed for another year to April 2024 — putting it 16 months later than originally planned.
--With assistance from Julie Johnsson.
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