The Defense Department and Lockheed Martin [LMT] Friday finalized two F-35 contracts worth $7.8 billion for a total of 71 jets to be produced in the sixth and seventh low-rate initial production (LRIP) lots, according to a Pentagon statement.
The LRIP 6 contract, valued at $4.4 billion, funds production of 36 aircraft. Unit prices for the LRIP 6 contract, not including engines, are $103 million per jet for 23 conventional F-35As, $109 million per jet for six short takeoff and landing (STOVL) F-35Bs and $120 million per jet for seven aircraft carrier variant F-35Cs. DoD said average aircraft unit cost for LRIP 6 is approximately 2.5 percent lower than LRIP 5 aircraft.
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| A from the 33rd Fighter Wing at Eglin AFB, Fla., flies over the Emerald Coast Sept. 19. Photo: Air Force. |
The LRIP 7 contract, valued at $3.4 billion, funds the production of 35 aircraft. Unit prices for the LRIP 7 contract, not including engines, are $98 million per jet for 24 F-35As, $104 million per jet for seven F-35Bs and $116 million per jet for four F-35Cs. DoD said the LRIP 7 contract had an average aircraft unit cost of nearly 6 percent lower than LRIP 5.
The 71 aircraft are in various stages of production, DoD said. Lockheed Martin will begin delivering LRIP 6 aircraft in second quarter 2014 and LRIP 7 jets in second quarter 2015. LRIP 6 also marks the first delivery of international F-35 jets for Italy and Australia and LRIP 7 will mark the first delivery to Norway.
Lockheed Martin will cover all cost overruns in LRIP 6 and LRIP 7, DoD said. LRIP 6 and 7 contracts also contain performance-based payments, whereby the contractor will receive incremental payment as measured goals are achieved along the production line until government aircraft acceptance. LRIP 6 and 7 also include a concurrency clause that requires Lockheed Martin to share costs equally with DoD for known concurrency changes arising from system development and demonstration (SDD) testing and qualification. Newly discovered concurrency changes identified during LRIP 6 and 7 production periods will be authorized via engineering change proposals.