Principle Agreement Reached On Two Lower Cost F-35 Contracts
The U.S. Department of Defense and Lockheed Martin have reached an agreement in principle for the next two F-35 Lightning II aircraft production contracts (Low-Rate Initial Production (LRIP) lots 6 and 7), which is expected to include 71 stealth fighter aircraft and continue a reduction in F-35 aircraft pricing. The contracting effort spanned six months from proposal to settlement. A decrease in F-35 LRIP 6-7 unit costs, coupled with negotiating lower prices on a number of other smaller contracts, will allow the Department to purchase all the aircraft originally planned, including those that were in jeopardy of being cut due to sequestration budget impacts. Cost details will be released once both contracts are finalized; however, in general, the unit prices for all three variants of the U.S. air vehicles in LRIP-6 are roughly four percent lower than the previous contract. LRIP-7 air vehicle unit prices will show an additional four percent reduction. The LRIP-7 price represents about an eight percent reduction from the LRIP-5 contract signed in December 2012.
