The Pentagon has signed off on the next two lots of purchases totaling 71 aircraft for the U.S. and four allies, the announced today.
The $7.8 billion deals cover low-rate initial production lots 6 and 7. LRIP 6 includes 23 F-35As, six F-35Bs and seven F-35Cs. LRIP 7 includes 24 F-25As, seven F-35Bs and four F-35Cs.
The per-unit airframe price for LRIP 6 is an average of 2.5% lower than LRIP 5; LRIP 7 prices are about 6% lower than LRIP 5.’s pricing excludes the cost of the Pratt & Whitney engine.
Thus far, the Pentagon has awarded $3.7 billion for LRIP 6 of the total $4.4 billion contract. Funds will be awarded incrementally as aircraft reach specific milestones in the production process. LRIP 7 is valued at $3.4 billion.
This is the first deal in which Lockheed Martin, the F-35 airframe prime contractor, assumes all responsibility for overruns over the target cost. For the previous five lots, the government and contractor shared at varying levels in overruns.
This is also the first contract for the F-35 in which the target unit airframe price is under $100 million; the deal calls for the price of the 24 F-35As in LRIP 7 to be delivered for $98 million apiece. Prices for the other variants are as follows in LRIP 6:
* F-35A $103 million;
* F-35B $109 million;
* F-35C $ 120 million;
And, for LRIP 7, the target for the F-35B is $104 million per unit with the C variant at $116 million per airframe.
These two lots also include aircraft for the U.K., Norway, Australia and Italy.
The contract calls for Lockheed Martin to assume more responsibility for the so-called concurrency costs associated with the aircraft in LRIPs 6 and 7. This refers to the price of retrofitting aircraft in these lots with fixes discovered in the development program as it continues through fiscal 2016.
Aircraft from LRIP 6 will begin being delivered in the second quarter of 2014, with LRIP aircraft following a year later.
Lockheed Martin officials are “extremely pleased” with the deals. They are a “significant milestone for the F-35 program and its path to enhanced affordability,” a company statement says.
Rear Adm. Randolph Mahr, F-35 deputy program manager, says the program office hopes to nail down the LRIP 8 early next year.