Pentagon, Lockheed Eye Agreement On Next F-35 Contracts This Fall

Reuters // September 23, 2015

The U.S. Defense Department on Tuesday said it hopes to reach agreement this fall with Lockheed Martin Corp on contracts for the next two batches of F-35 fighter jets in a deal that could be worth $15 billion.

"We're still in negotiations," Frank Kendall, defense undersecretary for acquisition, technology and logistics, told reporters after a ceremony marking the rollout of the first F-35 jet built for Norway. "I hope that they'll conclude by this fall."

Officials with Lockheed, the Pentagon's No. 1 supplier, echoed Kendall's view that negotiations for 60 jets in the ninth batch of jets, and 100 jets in the 10th batch could be wrapped up a bit earlier than initially predicted.

Pentagon and Lockheed officials had previously said only that they hoped to reach a deal by the end of the year.

U.S. defense officials are in separate talks with Lockheed for the aircraft, and Pratt & Whitney, a unit of United Technologies Corp, for the jet's F135 engines.

The department in November 2014 awarded Lockheed a contract valued at $4.7 billion for an eighth batch of F-35 fighter jets, a 43-jet deal that lowered the average price per jet by 3.5 percent from the last contract.

The government signed a separate contract valued at $1.05 billion for an eighth batch of engines built by Pratt & Whitney.

U.S. Air Force Lieutenant General Chris Bogdan said the failure of Congress to pass a budget for fiscal 2016, which begins Oct. 1, could result in a long-term resolution continuing spending at last year's levels, which would trim the Pentagon's planned F-35 purchase by 19 jets, 16 A-model jets and 3 B-model jets.

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