Lockheed Martin may not be happy with the Pentagon’s negotiating stance on the next lot of F-35 Joint Strike Fighter aircraft, but a key lawmaker is.

The Defense Department is refusing to sign a contract for the fifth lot of F-35s until Lockheed agrees to pay for a “reasonable share” of concurrency costs, which result from the overlap between development and production.

And Sen. John McCain (Ariz.), the top Republican on the Senate Armed Services Committee, couldn’t be more pleased. “Let me be clear: I strongly support the Department’s position,” McCain said Nov. 17, as the Senate began consideration of the fiscal 2012 defense authorization bill. “As we agree to buy more early-production jets while most of the developmental testing has yet to be done, Lockheed Martin must be held increasingly accountable for cost overruns that come as a result of wringing out necessary changes in the design and manufacturing process for this incredibly expensive aircraft.”

During committee action on the defense policy bill, McCain sought an amendment that would have put the Pentagon’s largest weapons program on probation if the cost for the fourth lot of aircraft grew by more than 10% by the end of this year and might have killed it altogether a year later. The amendment failed on a tie vote.

“My goal was to send a strong, simple, and powerful message to the Pentagon and to Lockheed Martin — a message that we will no longer continue down the road of excessive cost growth and schedule slips on this program just because other alternatives are hard to come by,” he said.

Instead of McCain’s provision, the bill includes one that requires the government to buy the fifth lot of Joint Strike Fighters on a fixed-price contract and that has Lockheed pick up any cost overruns beyond the target price of the contract. It was sponsored by Sen. Carl Levin (D-Mich.), the committee’s chairman.

“Because I feel that it is essential to use fixed-price contracts for large Pentagon weapons programs, I supported the Chairman’s amendment during the markup and I support it now,” McCain said.

In addition to McCain’s statement on the Senate floor, the White House Office of Management and Budget weighed in, threatening to kill the defense policy bill over certain detainee policy provisions in a Statement of Administration Policy.

The Obama administration also is objecting to the bill’s decision to end funding for the Medium Extended Air Defense System (Meads).

If that bill becomes law, it could “trigger unilateral withdrawal by the United States from the Meads Memorandum of Understanding (MOU) with Germany and Italy, which could further lead to a DOD obligation to pay all contract costs — a scenario that would likely exceed the cost of satisfying DOD’s commitment under the MOU,” the statement says, adding that it could call into question the administration’s willingness to honor its international agreements.

The committee removed funding for Meads because it was a high-risk program and fielding it was unaffordable, Levin said.

“We recognize that under the Memorandum of Understanding, our decision not to fund this program could require the United States to pay for a program in which it is no longer participating,” Levin said. “However, the committee concluded that the course proposed by the Department is untenable and that the Department should explore all options with our allies before continuing to fund a program which we no longer need.”