Pentagon Contract Announcement
(Source: US Department of Defense; issued Feb. 5, 2019)
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is awarded a $90,345,180 modification to a previously awarded cost-plus-incentive-fee contract (N00019-17-C-0001).

This modification provides for the identification and execution of cost reduction initiatives to reduce the cost of the F-35 Lightning II Air System. (Emphasis added—Ed.)

Work will be performed in Fort Worth, Texas, and is expected to be completed in June 2022.

Fiscal 2017 aircraft procurement (Air Force, Navy, and Marine Corps) funds in the amount of $90,345,180 will be obligated at time of award, all of which will expire at the end of the current fiscal year.

This modification combines purchases for the Air Force ($44,929,818; 50 percent); Navy ($26,000,000; 29 percent); and the Marine Corps ($19,415,362; 21 percent).

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

(EDITOR’S NOTE: This award is truly a thing of contractual beauty: As Lockheed Martin’s bills for the F-35 fighter are too high, the Pentagon wants to lower them, so Lockheed bills $90 million for the "identification & execution of cost reduction initiatives to reduce cost of F-35 Air System."
This could go around and around forever, generating more and more revenue for Lockheed, who thus has a perverse incentive not to cut costs -- or not cut them too much – so as to continue getting paid to find yet more ways to cut costs.)


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