The F-35 Joint Program Office (JPO) and Lockheed Martin [LMT] entered into a “handshake agreement ” on July 18 for up to 375 F-35s in Lots 15 to 17, DoD said on July 19.

Pentagon acquisition chief William LaPlante said that DoD would provide further details of the contract upon award.

“Over the past three months, the F-35 Joint Strike Fighter Joint Program Office and Lockheed Martin made significant progress in negotiations,” DoD said in a statement. “The team deliberately addressed significant real-world challenges—including the COVID-19 pandemic, associated supply chain impacts and workforce disruptions, and inflation—to reach a handshake agreement. While the handshake agreement is on a basis of 375 aircraft, the final aircraft quantity may change based on any adjustments made by the U.S. Congress in the Fiscal Year 2023 budget and any orders requested by international partners.”

The F-35 program is pursuing contract award for Lots 15 and 16 “as a high priority,” while the program plans to exercise a contract option for Lot 17 after Congress passes the fiscal 2023 defense appropriations bill, DoD said.

The contract for Lots 15-17 would represent a significant step forward for Lockheed Martin, which could receive $30 billion for the new jets, and for the program, which has encountered maintenance, spare parts delivery, and mission capability rate problems for the fighter.

One prominent problem has been an insufficient number of operating Pratt & Whitney [RTX] F135 engines for the fighters, particularly the Air Force F-35A, but on July 19, the same day as the DoD statement, Pratt & Whitney’s Jen Latka, the vice president of the F135 program at the company, said in a statement that “it is clear that F135 sustainment has turned the corner.”

The company has said that the engine problems stemmed, not from a lack of F135 reliability, but from a depot maintenance shortage.

“The F135 sustainment network more than doubled the number of power modules it produced in 2021 over 2020 and is on track to grow 60 percent in 2022 through the increased capacity provided by international and contractor logistics site depots,” per Pratt & Whitney. “The F135 Heavy Maintenance Center at Tinker Air Force base, the heart of the network, produced 3.5X more power modules in 2021 than it did in 2020 and is on track to once again exceed its annual target. As a result of this progress, overall engine availability–measured as Mission Imparied Capability Awaiting Parts, also known as Aircraft on Ground–has improved by approximately 60 percent at the end of Q2 2022 over the end of 2021.”

Pratt & Whitney said that it has focused on the Component Improvement Program for the F135 to increase the engine’s time on wing.

The DoD goal is for no more than 6 percent of F-35s to be grounded due to engine status. The Government Accountability Office (GAO) has said that, before January last year, the program had met that goal in 45 of 49 months from 2016 through 2020 but that non-mission capable rate due to engine status was above 6 percent from April last year to February this year because of sustainment challenges, including a shortage of depot capacity to repair the F135 power modules and a shortage of certain spare parts.

According to a new GAO report, military service officials said that “a goal of no more than 6 percent for the non-mission capable due to engine rate—even if met—would not allow the military services to effectively support National Defense Strategy missions, such as those related to China and Russia.”

While the F135 engine for all three F-35 variants has exceeded the mean flight hours between engine removals “by wide margins,” including by 1,000 hours for the 950 hour mean flight hour goal on the F-35A, the engine has not met the mean flight hours between unscheduled maintenance events and line replaceable component removals, GAO said in the new report.

Last December, the F-35 JPO said that increased depot capacity will help the program meet a goal of having only three percent of F-35s without operating engines by the end of this year.

Nevertheless, Air Force and Navy officials have said that the percentage of inoperable engines on other fighters, such as the Lockheed Martin F-16 and F-22, and the Boeing [BA] F/A-18E/F–has usually been one percent or less since 2017, as the services have maintained “ready to go” spare engine inventories for those fighters.

In addition to bolstering depot capacity for the F135 engine, the F-35 program also aims to begin retrofitting a new bushings assembly for the engine in March next year. Bushings are hollow components that allow the free rotation of parts without the need for lubrication.

“Beginning in June 2019, the [F-35] program discovered the movement of bushings in the F-35 engine,” the GAO said last April. “The movement, or migration, of these bushings resulted in a risk of in-flight engine shutdown due to damage from that debris. The program office redesigned the bushings assembly on this part of the engine, and a production break-in is planned to begin in the fourth quarter of 2022. The program office is inspecting the bushings every 60 flight hours, during scheduled engine inspections.”