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Lockheed awarded $6.1 billion deal for 57 F-35 airframes

Lockheed Martin will deliver 57 F-35 airframes for $6.1 billion in the ninth lot of low-rate initial production under the terms of a contract signed only after a 15-month negotiating process that failed to achieve a second deal the next lot of aircraft.

The LRIP 9 price falls by 3.7% on a weighted average from the previous lot of production awarded in December 2014, according to the F-35 joint programme office (JPO).

The $6.1 billion covers the structure and missions systems of the F-35 but excludes the cost of the Pratt & Whitney F135 engines, which were agreed under a separate contract awarded in April. The Department of Defense awarded P&W a $1.4 billion deal for 66 engines, which includes several spares.

The JPO opened negotiations with Lockheed 15 months ago with the intention of signing separate deals for LRIP 9 and LRIP 10, but the final agreement stopped short of that objective. But even that eventual LRIP 9 contract was not mutually agreed upon, according to Lockheed.

"It was a unilateral contract action, which obligates us to perform under standard terms and conditions, and previously agreed-to items," Lockheed says in an emailed statement. "We are disappointed with the decision by the Government to issue a unilateral contract action on the F-35 LRIP 9 contract. For the past 18 months, Lockheed Martin has negotiated in good faith consistent with our commitment to reach a fair and reasonable agreement on this critical program. We will continue to execute on the F-35 program and we will evaluate our options and path forward.”

Although Lockheed will continue work on the 57 aircraft, the company could reject the terms of the contract, a source told FlightGlobal. Lockheed could appeal the contract with the Armed Services Board of Contracts Appeals, but that decision will come within the coming months.

Lockheed will deliver 42 F-35As, 13 F-35Bs and two F-35Cs in LRIP 9, which are set to begin in this fiscal year. The aircraft will add to 209 F-35s already purchased in the first eight lots of low-rate initial production. Meanwhile, negotiations for 94 jets in LRIP 10 continue.

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