The Defense Department last week awarded Lockheed Martin a $3.5 billion contract for 31 F-35 strike fighters and associated equipment. This contract covers the F-35’s Lot 4 low-rate initial production. It is also notable because it represents the first fixed-price-incentive fee arrangement for F-35 production that requires Lockheed to share in the burden of any cost overruns. Lockheed will produce 10 Air Force F-35As, 16 Marine Corps F-35Bs four Navy F-35Cs, and one F-35B for Britain during this lot, according to Lockheed’s release. The Dutch also have an option to procure one F-35A. Assembly of these aircraft is expected to be complete in March 2013 at Lockheed’s facility in Fort Worth, Tex. The total contract value for LRIP 4 is $3.9 billion, including the previously awarded funding for long-lead-time materials. (See also DOD’s Nov. 19 list of major contracts)
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.