Lockheed Wins $2 Billion of Secondary F-35 Contracts In 3 Months
(Source: Defense-Aerospace.com; published Nov. 3, 2014)

By Giovanni de Briganti
PARIS --- In the three months since August 1, the F-35 Joint Program Office has awarded Lockheed Martin a total of 13 secondary contracts worth a total of $2 billion for a wide range of remedial and support services. These contracts are in addition to the annual production contracts for the F-35 airframe (Lockheed) and engines (Pratt & Whitney).

The contracts are described by the Pentagon as payment for work that ranges from fixing faults and failings in defective aircraft after delivery, to supplying new parts, to additional design and engineering services and to “post-production concurrency changes.” Two contracts are for specific airframe developments or components for Israel and Japan, but they are of marginal value ($68 million) compared to the total.

Fully eight of these contracts, worth a total of $488.9 million, cover the sixth Low-Rate Initial Production lot (LRIP 6), a previous production batch, and add an average of $15.8 million to each of the 31 aircraft that make up Lot 6. However, as the contracts were awarded well after the main lot production contract, they were not counted when computing aircraft unit costs, which thereby are substantially understated.

It also is worth noting that, although JPO chief Lt Gen Christopher Bogdan famously announced some years ago that the F-35 program would move to fixed-price contracts, all of those listed here are, in fact, “cost-plus-incentive-fee” contracts, which in other words guarantees a profit to the vendor. In other words, Lockheed is guaranteed a profit to fix defective aircraft which should have been delivered without defects.

Below are the contracts awarded to Lockheed from Aug. 1 to Oct 31, by date, as announced by the Pentagon.


Oct 30, 2014
http://www.defense.gov/Contracts/Contract.aspx?ContractID=5408
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $411,111,649 modification to a previously awarded cost-plus-incentive-fee contract (N00019-15-C-0031) for the repair and replenishment of government-owned F-35 Lightening Joint Strike Fighter assets, including spare parts for the U.S. Navy, U.S. Marine Corps, U.S. Air Force and international partners.
In addition, this modification provides for sustainment analysis and training related efforts.
Work will be performed in Fort Worth, Texas (35 percent); El Segundo, California (25 percent); Warton, United Kingdom (20 percent); Orlando, Florida (10 percent); Nashua, New Hampshire (5 percent); and Baltimore, Maryland (5 percent), and is expected to be completed by November 2015.
Fiscal 2014 aircraft procurement (Navy, Marine Corps, and Air Force); fiscal 2015 aircraft procurement (Navy and Air Force); fiscal 2015 operations and maintenance (Navy, Marine Corps, and Air Force); and international partner funds in the amount of $159,958,125 are being obligated at time of award, $55,569,144 of which will expire at the end of the current fiscal year.
This contract combines purchases for the U.S. Navy ($69,514,030; 17 percent); the U.S. Marine Corps ($114,460,228; 27 percent); the U.S. Air Force ($202,698,107; 49 percent); and the international partners ($24,439,284; 7 percent).
The Naval Air Systems Command, Patuxent River, Maryland, is the contract activity.


October 28, 2014 (Two contracts)
http://www.defense.gov/contracts/contract.aspx?contractid=5406
-- Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $391,607,952 cost-plus-incentive-fee contract to provide recurring sustainment support for delivered air systems for the F-35 Lightning II program including, but not limited to:
- ground maintenance activities;
- action request resolution;
- depot activation activities;
- Automatic Logistics Information System operations and maintenance;
- reliability, maintainability and health management implementation and support;
- supply chain management; and
- activities to provide and support pilot and maintainer initial training for the U.S Air Force, U.S. Marine Corps, U.S. Navy, and international partners.
Work will be performed at Fort Worth, Texas (35 percent); El Segundo, California (25 percent); Warton, United Kingdom (20 percent); Orlando, Florida (10 percent); Nashua, New Hampshire (5 percent); and Baltimore, Maryland (5 percent), and is expected to be completed by Nov. 30, 2015.
Fiscal 2014 and 2015 aircraft procurement (Air Force, Navy and Marine Corps) funds, and international partner funds in the amount of $360,313,730, are being obligated at time of award, none of which will expire at the end of the current fiscal year.
This contract was not competitively procured according to FAR 6.302-1.
The Naval Air System Command, Patuxent River, Maryland is the contract activity (N00019-15-C-0031).


-- Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $220,748,611 modification to a previously awarded cost-plus-incentive-fee contract (N00019-12-C-0070).
This modification provides for the System Development and Demonstration Phase I Increment 2, to continue support of F-35A Conventional Take Off and Landing (CTOL) air system for the government of Israel under the foreign military sales program.
This modification includes the development and demonstration of the hardware and software for the Israel F-35A CTOL air system.
Work will be performed at Fort Worth, Texas, and is expected to be completed in March 2019.
Foreign military sales funds in the amount of $77,777,441 are being obligated on this award, none of which will expire at the end of the current fiscal year.
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


October 22, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5402
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a not-to-exceed $110,515,999 cost-plus-fixed-fee delivery order against a previously issued basic ordering agreement (N00019-14-G-0020) for the procurement and installation of 281 retrofit modification kits to incorporate into designated aircraft and supporting subsystems that are critical to meeting F-35 requirements.
Work will be performed in Fort Worth, Texas (45 percent); Ogden, Utah (20 percent); Cherry Point, North Carolina (20 percent); Yuma, Arizona (5 percent); Eglin Air Force Base, Florida (5 percent); and Edwards Air Force Base, California (5 percent), and is expected to be completed in March 2018.
Fiscal 2013, 2014, and 2015 aircraft procurement (Navy, Marine Corps, and Air Force) funds, fiscal 2015 research, development, test and evaluation funds (Navy, Marine Corps, and Air Force), and Joint Strike Fighter partner funds in the amount of $55,976,500 are being obligated on this award, $759,000 of which will expire at the end of the current fiscal year.
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


October 09, 2014 (Two contracts)
http://www.defense.gov/contracts/contract.aspx?contractid=5394

-- Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $37,129,230 modification to the previously awarded F-35 Lightning II Low Rate Initial Production Lot VI contract (N00019-11-C-0083).
This modification provides for non-recurring efforts associated with the procurement of training spares for Israel and Japan and two full mission simulators in support of Japan’s F-35A Conventional Take-Off and Landing (CTOL) Air System for pilot training.
Work will be performed in Orlando, Florida (70 percent), and Fort Worth, Texas (30 percent), and is expected to be completed in September 2017.
Foreign military sales funds in the amount of $37,129,230 will be obligated at time of award, none of which will expire at the end of the current fiscal year.
This modification combines purchases for the governments of Japan ($34,455,709; 92.8 percent) and Israel ($2,673,521; 7.2 percent) under the Foreign Military Sales Program.
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


-- Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $30,927,881 modification to the previously awarded F-35 Lightning II Low Rate Initial Production Lot VI contract (N00019-11-C-0083).
This modification provides for non-recurring efforts associated with the procurement of two full mission simulators in support of Israel’s F-35A Conventional Take-Off and Landing Air System for pilot training.
Work will be performed in Orlando, Florida (70 percent), and Fort Worth, Texas (30 percent), and is expected to be completed in September 2017.
Foreign military sales funds in the amount of $30,927,881 will be obligated at time of award, none of which will expire at the end of the current fiscal year.
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


September 25, 2014
http://www.defense.gov/Contracts/Contract.aspx?ContractID=5384
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $331,408,457 cost-plus-fixed-fee modification to a previously awarded advance acquisition contract (N00019-13-C-0008) for the procurement of production non-recurring items, including special tooling, special test equipment items and software lab upgrades in support of F-35 Lightning II Joint Strike Fighter aircraft for the U.S. Marine Corps, U.S. Air Force, U.S. Navy, international partners, and foreign military sales.
Work will be performed in Fort Worth, Texas (32 percent); Nashua, New Hampshire (12 percent); Orlando, Florida (11 percent); El Segundo, California (11 percent); San Diego, California (10 percent); Cameri, Italy (6 percent); Palmdale, California (5 percent); Samlesbury, United Kingdom (3 percent); Irvine, California (2 percent); Baltimore, Maryland (2 percent); Cheltenham, United Kingdom (2 percent); East Aurora, New York (2 percent); and Marietta, Georgia (2 percent).
Work is expected to be completed in December 2017.
Fiscal 2014 aircraft procurement (Navy, Air Force, and Marine Corps), and international partner and foreign military sales funds in the amount of $331,408,457, are being obligated at time of award, none of which will expire at the end of the current fiscal year.
This modification combines purchases for the U.S. Air Force ($112,965,518; 34 percent); U.S. Navy ($56,482,759; 17 percent); the U.S. Marine Corps ($56,482,759; 17 percent); international partners ($61,038,399; 19 percent); and foreign military sales ($44,439,022; 13 percent).
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting authority.


September 19, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5380
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $24,868,359 modification to the previously awarded F-35 Lightning II Low Rate Initial Production (LRIP) Lot VI contract (N00019-11-C-0083).
This modification is to realign and increase concurrency funding for post-production concurrency changes to LRIP Lot VI aircraft.
Work will be performed in Fort Worth, Texas, and is expected to be completed in November 2016.
Fiscal 2012 aircraft procurement (Navy, Marine Corps, and A ir Force) funds in the amount of $24,868,359 will be obligated at time of award, all of which will expire at the end of the current fiscal year.
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


August 27, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5362
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $122,217,252 modification to a previously awarded F-35 Lightning II Low Rate Initial Production (LRIP) Lot VI cost-plus incentive fee contract (N00019-11-C-0083) for the procurement of support equipment for the F-35 aircraft such as sensor covers, tool sets, vacuum clamp sets, and heat gun assemblies. Work will be performed in Orlando, Florida (73 percent); Redondo Beach, California (25 percent); and Fort Worth, Texas (2 percent), and is expected to be completed in November 2016. Fiscal 2012 aircraft procurement (Air Force) funds in the amount of $122,217,252 will be obligated at time of award, all of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


August 26, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5361
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $19,994,879 modification to the previously awarded F-35 Lightning II Low Rate Initial Production Lot VI contract (N00019-11-C-0083). This modification provides site activation efforts required for the stand-up of the United Kingdom Joint Strike Fighter Academic Training Center at Royal Air Force Marham, United Kingdom. Work will be performed in Marham, United Kingdom (55 percent); Fort Worth, Texas (35 percent); and Orlando, Florida (10 percent), and is expected to be completed in December 2015. International partner funds in the amount of $19,994,879 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


August 25, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5360
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded an $8,167,322 modification to the previously awarded F-35 Lightning II Low Rate Initial Production (LRIP) Lot VI contract (N00019-11-C-0083). This modification provides for the maintenance and support for the F-16 chase aircraft supporting the F-35. Work will be performed in Fort Worth, Texas, and is expected to be completed in June 2015. Fiscal 2012 aircraft procurement (Air Force) funds in the amount of $8,167,322 will be obligated at time of award, all of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


August 20, 2014
http://www.defense.gov/Contracts/Contract.aspx?ContractID=5356
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $12,789,893 modification to the previously awarded F-35 Lightning II Low Rate Initial Production (LRIP) Lot VI contract (N00019-11-C-0083). This modification provides for the procurement of F-35 Deployable Spares Package spares for the U.S. Air Force. Work will be performed in Owego, New York (21 percent); Orlando, Florida (20 percent); Nashua, New Hampshire (18 percent); United Kingdom (18 percent); Torrance, California (15 percent); Marion, Virginia (3 percent); Melbourne, Florida (3 percent); Endicott, New York (1 percent); Williston, Vermont (0.5 percent); and Duarte, California (0.5 percent). Work is expected to be completed in May 2017. Fiscal 2012 aircraft procurement (Air Force) funds in the amount of $12,789,893 will be obligated at time of award, all of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


August 15, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5352
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $232,794,734 cost-plus-incentive-fee modification to the previously awarded F-35 Lightning II Low Rate Initial Production Lot VI contract (N00019-11-C-0083). This modification provides for non-recurring sustainment activities, to include procurement of 19 training devices and 69 items of complex support equipment. Work will be performed in Orlando, Florida (96 percent); Owego, New York (2 percent); and Fort Worth, Texas (2 percent), and is expected to be completed in June 2017. Fiscal 2012 aircraft procurement (Navy and Air Force) funds and international partner funds in the amount of $232,794,734 will be obligated at time of award, $190,999,120 of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


August 11, 2014
http://www.defense.gov/contracts/contract.aspx?contractid=5348
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $46,197,710 cost-plus-fixed-fee, fixed-price-incentive firm modification to a previously awarded advance acquisition contract (N00019-13-C-0008) for production non-recurring technical assistance in support of F-35 Lightning II Joint Strike Fighter aircraft for the U.S. Marine Corps, U.S. Air Force, U.S. Navy, and international partners.
Work will be performed in El Segundo, California (38 percent); Fort Worth, Texas (24 percent); Samlesbury, United Kingdom (16.5 percent); San Diego, California (14 percent); Orlando, Florida (3.4 percent); Nashua, New Hampshire (2.3 percent); Palmdale, California (1.2 percent); Marietta, Georgia (0.3 percent); Amityville, New York (0.2 percent); Laval, Canada (0.1 percent), and is expected to be completed in May 2017. Fiscal 2012 aircraft procurement (Air Force); fiscal 2013 aircraft procurement (Navy and Marine Corps); and international partner funds in the amount of $46,197,710 are being obligated at time of award, $18,185,731 of which will expire at the end of the current fiscal year.
This modification combines purchases for the U.S. Air Force ($18,185,731; 39.3 percent); U.S. Navy ($9,092,864; 19.7 percent); U.S. Marine Corps ($9,092,864; 19.7 percent), and international partners ($9,826,251; 21.3 percent).
The Naval Air Systems Command, Patuxent River, Maryland, is the contracting authority.


Story history
-- 04 Nov 2014: Added author's byline.


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