US DoF and Lockheed Martin contract 43 F-35 Lightning II jets

The US Department of Defense and Lockheed Martin finalised the eighth F-35 Low Rate Initial Production (LRIP-8) contract today for 43 F-35 Lightning II airframes valued at $4.7 billion.

The US Department of Defense and Lockheed Martin finalised the eighth F-35 Low Rate Initial Production (LRIP-8) contract today for 43 F-35 Lightning II airframes valued at $4.7 billion.

The contract includes $0.5 billion of advance procurement funding that was announced at the time of award.

The 43 airframes include 29 jets for the United States and 14 for five international countries including four to be sent to the UK. This agreement reflects an average airframes unit cost approximately 3.5% lower than the LRIP 7 contract signed in 2013 and a 57 percent reduction since LRIP 1.

U.S. LRIP 8 per variant airframe unit prices (not including engine cost):

  • 19 F-35A CTOL – US Air Force – $94.8 million/airframe
  • 6 F-35B STOVL – US Marine Corps – $102.0 million/airframe
  • 4 F-35C CV – US Navy (3) and US Marine Corps (1) – $115.7 million/airframe

The LRIP 8 contract procures 29 US airframes including 19 F-35As, six F-35Bs and four F-35Cs.  It also provides for the production of the first two F-35As for Israel and the first four F-35As for Japan, along with two F-35As for Norway and two F-35As for Italy.  The UK will receive four F-35Bs.

The contract also funds manufacturing-support equipment as well as ancillary mission equipment.  Lockheed Martin will begin delivering LRIP 8 aircraft in early spring 2016.  Once production of LRIP 8 aircraft is completed, more than 200 F-35s will be in operation by eight nations.

LRIP 8 contract terms continue to eliminate the government’s exposure to risk by having Lockheed Martin cover 100% of any cost overruns.  The Government and Lockheed Martin will share returns derived from any under-runs in target cost (20% for Government and 80% for Lockheed Martin).

The contract also includes a concurrency clause which requires Lockheed Martin to share costs equally with the Government (50/50) for known concurrency changes arising from system development and demonstration testing and qualification.

The LRIP 8 contract contains performance-based payments, whereby the contractor will receive incremental payment as specified performance criteria are achieved along the production line until Government aircraft acceptance.

As of November, 115 F-35s, including test aircraft, were delivered from Lockheed Martin’s production facility in Fort Worth, Texas.  The US, eight Partner nations, and three Foreign Military Sales customers have announced plans to procure more than 3,200 F-35 aircraft over the life of the program.