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Pentagon To Sign Deal for 32 F-35s

Dec. 12, 2012 - 03:10PM   |  
An F-35A completes a check flight from the Fort Worth, Texas, F-35 factory in October.
An F-35A completes a check flight from the Fort Worth, Texas, F-35 factory in October. (Lockheed Martin)
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The Pentagon has notified Congress of its intent to sign a multibillion-dollar deal with Lockheed Martin for 32 F-35 Joint Strike Fighters, according to a senior defense official. The actual inking of the contract is expected on Dec. 14.

The final dollar value of the contract will be determined when the contract is signed, said Frank Kendall, undersecretary of defense for acquisition, technology and logistics. The Pentagon also expects a preliminary deal for the sixth batch of F-35s in the near future.

“I think we made a lot of progress over the course of our negotiations in getting to a mutual understanding of where the program really is and what the costs are,” Kendall said. “I think we made an enormous amount of progress.”

The signing of the contract will bring to an official close more than a year of sometimes turbulent negotiations that boiled over in September when the Lt. Gen. Christopher Bogdan, the F-35 program manager, called the relationship between the DoD and Lockheed “the worst I have ever seen.” At the time, Bogdan was the deputy program manager.

This was the first time DoD acquisition officials used a new negotiation tool, called a should-cost analysis. The analysis was based on several years of F-35 cost data as well as data from the acquisition of the F-22A fighter, a similar stealthy fighter built by Lockheed and flown by the Air Force.

“We’re able to take all of that data and sit down at the table with Lockheed and go through in an enormous amount of detail all the elements of their cost and project forward from what they’ve already done,” Kendall said.

Overall, Kendall characterized the use of the should-cost analysis as an “extremely useful exercise.”

The Pentagon has put incentives in place for Lockheed if it meets or exceeds certain benchmarks.

“I think we have moved to where we all — both parties, Lockheed and the government — have a very good understanding for the cost basis for the F-35,” Kendall said. “I expect that the future negotiations for production will be much easier. They should be just because we have much less to disagree on.”

The F-35 is the Pentagon’s most expensive weapon program, with its total procurement and research-and-development expected to cost almost $400 billion. The Air Force, Navy and Marine Corps all plan to fly different versions of the jet. A number of U.S. allies have purchased, or plan to buy, the jet.

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