Lockheed Martin (NYSE: LMT) is close to signing a $2.2 billion contract with the U.S. Air Force for the fifth and sixth Advanced Extremely High Frequency satellites, according to a Reuters report.
Andrea Shalal-Esa writes a preliminary deal for the satellites was agreed upon in December and another handshake agreement was made in September.
Lt. General Ellen Pawlikowski, commander of the Space and Missile Systems Center at Air Force Space Command, told Reuters the Air Force will save more than $1 billion from original cost estimates under the new deal.
Reuters reports that a finalized contract should close by the end of October.
Mark Calassa, Lockheed vice president of protected communication systems, told Reuters the fifth and six satellites are estimated to cost 35 percent less than previous satellites.
“We did this by transitioning to fixed price, locking in savings with a dual buy and combining similar teams across our military space line of business, ” he told Reuters.