Reports: DoD Issues $6.1B ‘Unilateral Contract Action’ on 9th Lockheed F-35 Production Batch


F-35The Defense Department has finalized a “unilateral contract” worth more than $6.1 billion to fund Lockheed Martin‘s (NYSE: LMT) low-rate initial production of 57 lot 9 F-35 fighter jets, Reuters reported Wednesday.

Mike Stone writes the deal covers 42 F-35As for the U.S. Air Force, Japan, Israel and Norway; 13 F-35Bs for the U.S. Marine Corps and the U.K; and two F-35Cs for the U.S. Navy.

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The report said Lockheed has built the previous fighter aircraft batches with partners Northrop Grumman (NYSE: NOC), BAE Systems and United Technologies Corp.‘s (NYSE: UTX) subsidiary Pratt & Whitney through “undefinitized” agreements with DoD.

Lockheed expressed disappointment over the department’s unilateral contract decision and said the latest deal  obligates the company “to perform under standard terms and conditions, and previously agreed-to items.”

The Wall Street Journal reported Tuesday that negotiations between the parties over F-35 production costs took longer than previously anticipated as DoD seeks to lower the price of the F-35A variant by the end of the decade to roughly $80 million.

DoD and Lockheed are still in talks about a separate contract for the fighter aircraft’s lot 10, according to the report by Doug Cameron.

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