The Navy on Wednesday awarded Lockheed Martin [LMT] a contract modification that allows the company to take the first steps toward a Lot 12 contract of the F-35 Joint Strike Fighter worth up to $22 billion and including 255 aircraft.

The current modification, worth $6 billion, is for the production and delivery of 106 F-35 aircraft to the U.S. military, to include 64 F-35A variants for the Air Force, 26 F-35B vertical-takeoff-and-landing platforms for the Marine Corps and 16 F-35C Navy aircraft, according to the contract release. It also includes 89 F-35A and B variants for non-DoD partner nations and 60 F-35A aircraft for foreign military sales customers, along with “long-lead parts” for Lot 14 F-35 development.

Lockheed Martin's F-35 Lightning II at the 2018 Paris Air Show. Photo: Lockheed Martin
Lockheed Martin’s F-35 Lightning II at the 2018 Paris Air Show. Photo: Lockheed Martin

“This Undefinitized Contract Action will provide critical funds to ensure F-35 production and cost reduction efforts remain on schedule as we partner with the F-35 Joint Program Office to finalize the formal contract agreement,” said Lockheed Martin in an emailed statement Wednesday. “The acquisition approach for Lots 12-14 will deliver significant cost savings and is critical to achieving our joint goal of an $80 million F-35A for aircraft ordered in 2020.”

F-35 Program Executive Officer Vice Adm. Mat Winter told reporters last month that the joint program office and Lockheed Martin were on track to lower the unit cost to $80 million in the next two years.  (Defense Daily, Oct. 2) A Lot 12 F-35A unit price will be determined once negotiations are complete, a Lockheed spokesman told Defense Daily Wednesday evening.

The contract modification funds the continuation of production activity for all Lot 12 aircraft, as well as aircraft for several international customers in LRIPs 12, 13 and 14, according to the company. LRIP 12, 13 and 14 aircraft deliveries will begin in 2020, 2021 and 2022, respectively.

“This award brings the Department of Defense into compliance with congressional direction by placing all 20 FY18 (Lot 12) and 16 FY19 (Lot 13) congressional plus up aircraft on contract,” Lockheed Martin said.

Work is expected to be completed in March 2023. About $6 billion is being obligated at the time of award, divided between fiscal years 2018 and 2019 U.S. aircraft procurement funds, non-DoD participant funds and FMS dollars. The Naval Air Systems Command at Patuxent River, Maryland is the contracting activity.

Work will be divided, with the majority being conducted at several U.S.-based Lockheed Martin locations, as well as facilities in the United Kingdom, Italy and Japan.