Lockheed, US government strike deal on next F-35 order

[ErnstBlofeld]

Flight Global/Stephen Trimble:

The US government has reached an agreement with Lockheed Martin on the structure of a fixed-price contract worth more than $5 billion for up to 32 more F-35s.

The agreement is necessary before the Department of Defense signs a contract for the fourth lot of low-rate initial production, which orders F-35s projected for delivery after 2012.

The agreement ends a negotiating process that was extended by about four months to satisfy demands by the DoD for a fixed-price contract.

Lockheed previously delivered the Joint Strike Fighter under a "cost-plus" structure, allowing the contractor to be reimbursed for cost overruns.

Lockheed's $5 billion cost estimate for the new contract means the average cost for this batch of F-35s, excluding engines, is more than $156 million.

[ErnstBlofeld]

The costs will go down as more orders are taken.