The Pentagon on Friday issued a contract for Lockheed Martin [LMT] for the fifth low-rate initial-production (LRIP 5) contract for the construction of 30 F-35 Joint Strike Fighters.
The Pentagon announced the $4 billion fixed-price incentive contract for a program under intense scrutiny because of cost overruns and delays. The contract calls for the production of 21 versions of the Air Force’s F-35A variant, six of the Navy’s F-35C version for aircraft carriers, and three of the Marine Corps F-35Bs.
The F-35Bs are designed for short take-off and vertical landing (STOVL) and has been the most troubled variant of the Joint Strike Fighters, having been placed under two years of probation in January.
The $382 billion fighter program is the largest in Pentagon history and has faced sharp criticism on Capitol Hill, raising the prospect of cuts to the program while the nation’s undergoes a constrained budget environment.
The JSF program office has been looking for ways to reduce costs and recently held contentious negotiations with Lockheed Martin for the fifth lot of the aircraft under low-rate initial-production (LRIP).
The JSF program office this week announced that the two sides had reached a tentative agreement for LRIP 5. The arrangement includes an agreement on a fixed-price type contract and a clause calling for the sharing of concurrency costs by the Pentagon and Lockheed Martin.
The Pentagon wanted the defense firm to assume a greater burden for concurrency costs incurred by modifications that must be done to the aircraft during development and testing.