Pentagon Contract Announcement
(Source: US Department of Defense; issued May 02, 2016)
Lockheed Martin Corp. is being awarded a $1.27 billion not-to-exceed undefinitized modification to the previously awarded low-rate initial production Lot 11 advance acquisition contract for aircraft added by the U.S. services in fiscal 2016 budget deliberations and by Congress in the Consolidated Appropriations Act, 2016.

The modification provides for the delivery of 13 F-35 Lightning II aircraft for the Marine Corps (six F-35B); Air Force (three F-35A); and Navy (four F-35C).

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 2019.

Fiscal 2016 aircraft procurement (Marine Corps, Air Force, and Navy) funds in the amount of $311.90 million will be obligated at time of award, none of which will expire at the end of the fiscal year.

This modification combines purchases for the Marine Corps ($574.20 million; 45.2 percent); Air Force ($252 million; 19.8 percent); and Navy ($445.60 million; 35 percent).

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

(EDITOR’S NOTE: This contract covers an addition 20 aircraft "added by the U.S. services in fiscal 2016 budget deliberations and by Congress in the Consolidated Appropriations Act, 2016," and so appears fairly straightforward.
The Pentagon has already awarded at least three "advance acquisition contracts" for Lot 11 aircraft (four with this one), where it normally awards one, and even as the Lot 9 and Lot 10 main contracts have still not been awarded.
These are the Lot 11 contracts awarded to date:
-- Nov 9, 2015: covered an undisclosed number of Lot 10 & Lot 11 aircraft ($112 million);
-- Dec 21, 2015: covered 80 F-35As, 7 F-35Bs and 4 F-35Bs, plus two more F-35As and more (number not specified) F-35Cs ($1.17 billion);
-- March 26, 2016: paid for "an effort to maintain the planned production schedule for low-rate initial production (LRIP) Lot 11 F-35 aircraft;" it also added 15 F-35As and 10 F-35Bs to Lot 11 ($179.9 million).
Separately, on April 11, 2016 Pratt & Whitney was awarded a contract for Lot 11 engines, covering 38 engines for the US, 14 engines for international partners, and 14 spare engines, for a grand total of 66 engines.
There is no clear reason why the F-35 Joint Program Office is breaking down Lot 11 contracts into odd sub-batches, to an unprecedented degree compared to previous Low Rate Initial Production (LRIP) contracts.
The result, intended or not, is to make it very difficult, if not impossible, to calculate Lot 11 unit costs, and to compare them to those of previous lots.
It is worth noting that, on the basis of this single contract, the US Air Force is paying $84 million for each of its three F-35As, and the US Navy $111.4 million for each of its four F-35Cs.
Clearly, when all Lot 11 contracts are awarded and totted up, unit prices will be much higher.)


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