Pentagon Contract Announcement
(Source: US Department of Defense; issued July 31, 2019)
Lockheed Martin Corp., doing business as Lockheed Martin Aeronautics, Fort Worth, Texas, has been awarded a $799,955,939 firm-fixed-price incentive contract for F-16 aircraft production.

This contract provides for the production and support of 14 Slovak Republic F-16 block 70 aircraft.

Work will be performed at Greenville, South Carolina, and is expected to be completed by Jan. 31, 2024.

This contract award involves 100% foreign military sales to the Slovak Republic. This award is the result of a Slovak Republic-conducted competition.

Foreign Military Sales funds in the amount of $799,955,939 are being obligated at time of award.

The Air Force Life Cycle Management Center, Wright Patterson Air Force Base, Ohio, is the contracting activity (FA8615-19-C-6053).

(EDITOR’S NOTE: Discounting the support part of this contract, the unit cost of each of these fourteen F-16 Block 70 fighters works out to $57.1 million.
By comparison, Bulgaria has been charged $1.26 billion for eight F-16s it is also buying, or a contract unit cost of $157.7 million, albeit with a small weapons and support contract.
There is no obvious explanation for a price that varies by a factor of 1:3 for the same aircraft, ordered at the same time, except that Lockheed charges its direct sales customers as much as the market can bear.
Another possibility is that it offers other inducements to persuade buyers to pay substantially more for its products than other competitors are offering.)


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