The Pentagon and have agreed to a handshake deal for the latest two lots of airframes, and based on cost projections the program for the first time is targeting a unit price under $100 million, excluding engines and retrofits.
The deal covers 36 aircraft in low-rate, initial production (LRIP) lot 6 and another 35 in LRIP 7. Mandatory cuts handed down by sequestration in the fiscal 2013 budget did not ultimately affect the number of aircraft in LRIP 6, as once thought.
The total contract price and per-unit price figures will not be released until the contract is signed, according to Michael Rein, a Lockheed Martin spokesman.
However, the company says that unit cost of each variant will be reduced by about 4% lot over lot. Based on the pricing targets for LRIP 5, which was inked late last year — $105 million for the F-35A, $113 million for the F-35B and $125 million for F-35C — the per-unit targets can be projected for these new LRIP 6 and 7 jets.
The F-35A variant, designed for conventional takeoff and landing (and the version with greatest appeal to international partners) is projected to cost $100.8 million in LRIP 6 and $96.8 million in LRIP 7. This is the first time since the program began production that the projected unit cost will be under $100 million.
The F-35B, optimized for short takeoff and vertical landing, is expected to cost $108.5 million in LRIP 6 and $104.2 million in LRIP 7.
Finally, the F-35C, designed with a larger wing for aircraft carrier operations, is expected to cost $120 million in LRIP 6 and another $115.2 million in LRIP 7.
These prices do not include the cost of engines; the government contracts separately with Pratt & Whitney to purchase the. Pratt & Whitney will not release its unit cost, but the Pentagon said that in LRIP 3, each F-35A engine cost roughly $16 million and each F-35B engine cost about $38 million. Pratt and the Pentagon remain in contract negotiations for engines for LRIP 6, says company spokesman Matthew Bates.
These estimates also exclude the cost of retrofitting the aircraft that have been produced with upgrades required as a result of discoveries in flight testing that occurred in parallel with early manufacturing work.
Based on a May report, the Pentagon estimates that each of its aircraft in LRIP 6 and 7 would require another $7.4 million for retrofits. In LRIP 6-7, the government and company have agreed to split equally the cost of those known retrofits at the time of contract signature. Any new problems that crop up in flight trials will require full payment by the government, according to a company statement.
Based on what is known of engine cost, retrofit estimates and the target-unit cost projections, an F-35A in LRIP 6 would cost the U.S. government a total of roughly $120.5 million and $116.5 million in LRIP 7.
Likewise, using these estimates, the F-35B is estimated at $150.2 million in LRIP 6 and $145.9 million in LRIP 7. These calculations include only half of the retrofit estimate provided by the Pentagon to Congress in May because the company would be required to pay for the other half.
LRIPs 6-7 will be the first contract for which Lockheed Martin assumes all responsibility for exceeding the target cost of the air vehicles, according to Rein.
International customers would not be required to pay the same retrofit costs as the U.S. government, as the Pentagon is picking up the nonrecurring engineering to develop the fixes.
LRIP 6 includes 18 F-35As for the U.S. Air Force; six F-35Bs for theand seven F-35Cs for the Navy. It also includes three F-35As for Italy and 2 for Australia.
LRIP 7 includes 19 F-35As for the U.S. Air Force; six F-35Bs for the Marine Corps and four F-35Cs for the U.S. Navy. It also includes another 3 F-35As for Italy, two F-35As for Norway and one F-35B for the United Kingdom.
Air Force Lt. Gen. Christopher Bogdan, F-35 program executive officer, said last winter he expected to stabilize the F-35A unit price at $80-90 million at full-rate production, when no retrofits should be required.