US government officials have delivered the first formal response to Lockheed Martin’s 14-month-old pricing proposal for more than 100 F-35s ordered under the 11th annual lot of low-rate initial production (LRIP 11), says Lockheed chief financial officer Bruce Tanner.
The step revives pricing negotiations on LRIP 11 between Lockheed and the joint programme office a year after long-delayed contracts for lots 9 and 10 were finalised after the personal intervention of US president Donald Trump.
“The government’s first offer just came back within the last two or three weeks. We’re evaluating that,” says Tanner, speaking at the Cowen Aerospace/Defense & Industrials Conference on 8 February.
Tanner offered no explanation for the delay between Lockheed’s original proposal submission and the government’s first response. The Pentagon’s F-35 Joint Programme Office did not immediately respond to a request for comment. But the delay drew a soft complaint from Tanner.
“We’re about 50% of the way spent through LRIP 11 at this point of time,” Tanner says. “We’re actually fairly late in the day for getting an offer back. Hopefully, we’ll get to closure pretty soon.”
The Department of Defense awarded Lockheed an interim contract for $5.58 billion last July to continue building LRIP 11 aircraft as negotiations continue. The final cost of F-35s built for LRIP 11 could be worth twice that amount. Lockheed received a $9 billion contract to build 90 F-35s for LRIP 10.
Meanwhile, Lockheed has ordered suppliers to ramp up production for LRIP lots 12-14. The government and international partners plan to commit to buying at least 440 F-35s over the three-year period. By 2022-23, Lockheed expects to be building between 150-170 F-35s a year, Tanner says.