Pentagon Contract Announcement
(Source: US Department of Defense; issued July 7, 2017)
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $5,577,714,486 modification to a previously awarded F-35 Lightning II low-rate initial production (LRIP) Lot 11 advance acquisition contract (N00019-16-C-0033).

The LRIP 11 contract contains requirements for the Air Force, Marine Corps, Navy, international partner nations, and foreign military sales (FMS) customers.

This modification provides for the procurement of 74 fiscal 2017 aircraft, comprised of 48 F-35A aircraft for the Air Force, 18 F-35B aircraft for the Marine Corps, and eight F-35C aircraft for the Navy and Marine Corps.

In addition, this modification adds funding to previously awarded fiscal 2015 and 2016 aircraft contract line item numbers for the U.S. Services.

Work will be performed in Fort Worth, Texas (55 percent); El Segundo, California (15 percent); Warton, United Kingdom (10 percent); Orlando, Florida (5 percent); Nashua, New Hampshire (5 percent); Baltimore, Maryland (5 percent); and Cameri, Italy (5 percent), and is expected to be completed in December 2020.

Fiscal 2015, 2016, and 2017 aircraft procurement (Air Force, Navy, and Marine Corps) funds in the amount of $4,491,634,930 will be obligated at time of award, $275,641,724 of which will expire at the end of the fiscal year.

This modification combines purchases for the Air Force ($3,428,766,751; 61 percent); Navy ($1,444,492,090; 26 percent); and the Marine Corps ($704,455,645; 13 percent).

An undefinitized not-to-exceed contract modification to fund procurement of 50 F-35 Partner and FMS aircraft for $2.2 billion is anticipated within the month of July 2017.

The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.


(EDITOR’S NOTE: To date, only three previous contracts have been made public for Lot 11 contracts.
The previous contracts were let on Dec. 18, 2015 ($1.17 billion), May 2, 2016 ($1.272 billion), March 27, 2017 ($179.8 million).
Including the one above, their aggregate value is $8.2 billion for 74 aircraft.
This works out to an average of $110.8 million per aircraft, excluding the engine as well as post-delivery fixes, upgrades and retrofit necessary to bring the aircraft up to scratch.
It also excludes hundreds of millions of dollars in contracts not tied to a specific production lot, but which are nevertheless awarded by, and paid by, the program.
The above announcement also mentions a second contract due to be awarded this month adding another 50 aircraft at a cost of $2.2 billion.
It is not clear why this contract was split into two awards on different dates.
However, when both are combined, the total value rises to $10.4 billion for 124 aircraft, setting the average cost at $83.9 million per aircraft, excluding engines as well as fixes, upgrades and retrofits.
When added, these will boost unit costs well beyond $100 million, since the engine alone costs around $15 million each.)


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