US President Donald Trump says that the Lot 10 contract for 90 Lockheed Martin F-35s will be $600 million cheaper overall thanks to heavy pressure from the White House, but Boeing will continue to be asked to compete for orders against the Lockheed stealth fighter.
Although no contract has been announced by the Defense Department or Lockheed, Trump’s remarks appear to resolve a six-week push to overcome a negotiating stalemate between Lockheed and the joint programme office on the Lot 10 contract.
“I got involved in that about a month ago,” Trump said during a meeting with small business owners at the White House on 30 January. “They were having a lot of difficulty. There was no movement. I was able to get $600 million off of those planes.”
That figure suggests a $6.67 million reduction on average for each of the 90 F-35s in the Lot 10 contract. But Trump did not reveal an absolute value for the Lot 10 deal, so it’s not clear if the $600 million cut adds to already planned cost reductions or augments them. Lockheed had committed to reducing the cost of the F-35A to an average of $80-85 million per aircraft by Fiscal 2019, down from over $102 million last year.
“I appreciate Lockheed martin for being responsive and that will be appreciated,” Trump says.
Though Trump criticised the F-35’s capabilities during his election campaign, he lauded the next-generation stealth fighter as a “great plane” that’s “now in good shape”.
Trump also thanked Boeing for responding to a request for a competing bid based on the F/A-18E/F, which shares many of the electronic and weapon capabilities of the F-35 but lacks the latter’s very low cross section to radar. Last week, Defense secretary James Mattis launched a review of the F-35C acquisition plan, which will be compared against buying more F/A-18E/Fs.
“I appreciate Boeing for coming in and competing, and now they will be competing during the process for the rest of the planes because there are thousands of more airplanes coming,” Trump says.
Negotiations on Lot 10 pricing on F-35 airframes began more than a year ago between Lockheed and the joint programme office. But the talks, which included separate terms on Lot 9, broke down last October. The JPO unilaterally mandated pricing terms for 57 F-35s in Lot 9, but deferred settling pricing on Lot 10.
By December, then-president-elect Trump got involved. In a series of tweets, Trump said that the F-35 programme and costs were "out of control". On 22 December, he tweeted: "Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!" The chief executives of Lockheed and Boeing met with Trump several times in the past month.
Despite the progress on Lot 10, Lockheed is still weighing options for legally challenging the JPO's unilateral contract action on Lot 9.