Pentagon locks in 10-year F-35 jet deal

Lockheed Martin and the Pentagon have penned an initial deal to produce at least 850 F-35 Lightning II fighter jets over ‌the next 10 years, the Defense Department announced Thursday.

As part of the agreement, Lockheed will put forward at least $7 billion in its own funding “for initiatives that support the F-35 program,” according to a Pentagon statement.

In a separate statement, Lockheed said it is looking to produce 156 aircraft a year under the deal.

The F-35, considered ​the world’s most advanced fighter jet, has been the subject of much congressional scrutiny due to the program’s cost overruns and the high price tag of each aircraft.

After he was first elected, then-President-elect Trump in 2017 pushed Lockheed to significantly lower the cost of each F-35, which the company agreed to.

Defense contractors have argued that under the typical way the U.S. government funds weapons procurement — in batches with funding needing to be secured every year through congressional appropriation — it makes it difficult to keep production lines running consistently.

Lockheed said the agreement eliminates “the annual contracting cycle that has historically strained the industrial base,” as it “will enable bulk procurement of raw materials and critical parts, slashing turnaround times and reducing logistics bottlenecks.”

The Pentagon didn’t reveal the potential total cost of the newly announced deal, which is labeled as a prearranged long-term contract and does not constitute an order. Execution of the agreement remains subject to congressional authorization and appropriations.

“If granted multiyear authority and associated appropriations in the coming months, the F-35 Joint Program Office and Lockheed Martin will work to finalize contract terms, pricing, and schedules through a formal contract award,” the company said.

Lockheed added that the deal is expected to save taxpayers billions of dollars over the F-35’s lifecycle and estimates it will support 317,000 U.S. jobs and generate nearly $79 ⁠billion in ​annual economic activity over the next decade.

“We have fundamentally changed how we stabilize the American defense industrial base to produce at speed and scale,” Under Secretary of Defense Michael Duffey said in the department’s statement. “This agreement ⁠with Lockheed Martin proves it. By aligning financial incentives with actual performance, we are ensuring our warfighters are equipped with the lethal capabilities they need to fight and win.”

Under the deal, Lockheed would build the 850 fighter jets, cover international orders and produce initial spare parts and modification kits.