June 12, 2019

NICE: Handshake Deal Shatters F-35 Price Target.

Lockheed Martin has tentatively agreed to a one-year contract with two priced options with the U.S. Defense Department that dramatically lowers the unit recurring flyaway costs for the F-35A a year ahead and beyond the previously stated goal of $80 million by the 14th lot of low-rate initial production (LRIP 14) in fiscal 2022.

If finalized, the “handshake” agreement would lower the cost of a currently $89.3 million F-35A by 8.8%, or $7.86 million each, from LRIP 11 to LRIP 12. A priced option in the deal would further lower the price of an F-35A to less than $80 million by LRIP 13, although Pentagon and Lockheed officials declined to provide specific figures for the option year.

“The handshake agreement, once finalized, will represent the largest F-35 production contract and the lowest aircraft prices in program history,” said Greg Ulmer, vice president and general manager of the F-35 program.

More like this, please.

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