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Lockheed Gets $5.6B Modification on Lot 11 F-35 Production Contract

Lockheed Martin (NYSE:LMT) has received a potential $5.58 billion contract modification from the U.S. Navy for the low-rate initial production of lot 11 fiscal 2017 F-35 Lightning II aircraft.

The modification covers the production of 48 F-35As for the U.S. Air Force, 18 F-35Bs for the U.S. Marine Corps and eight F-35Cs for USMC and the Navy as well as adds funds to previously awarded contract line item numbers for the service branches’ fiscal 2015 and 2016 aircraft, the Defense Department said Friday.

The Naval Air Systems Command will obligate $4.5 billion from the military branches’ aircraft procurement funds for fiscal years 2015 to 2017 at the time of award.

Lockheed’s aeronautics business will perform work in Texas, California, Florida, New Hampshire, Maryland, Italy and the U.K. through December 2020.

DoD added that a potential $2.2 billion contract modification is expected to be awarded this month to fund the acquisition of 50 fighter jets in support of international partner countries and foreign military sales clients.

Defense News reported Saturday Joe DellaVedova, a spokesman for the F-35 joint program office, said JPO plans to finalize negotiations on the final contract by the end of 2017 and that an interim contract award is in response to “complex production lines and supply chain dynamics.”

“We are confident that the final negotiated Lot 11 aircraft unit prices will be less than Lot 10,” DellaVedova added.

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