Lockheed Proposes Five-Year F-35 Sustainment Contract to DoD Officials

Jeff Brody

Lockheed Martin (NYSE: LMT) has submitted to the Department of Defense a five-year arrangement to maintain F-35 jets and save DoD as much as $1B, Defense One reported Monday.

The report said F-35 sustainment contracts are negotiated between the two parties on an annual basis and if the Pentagon approves the 25-page contract proposal, the company will allocate $1.5B for long-lead parts as well as further develop the aircraft's software for logistics and maintenance.

“It’s a commitment on the company’s part to a five-year deal and it would bring along the partners as well as the supply chain and allow us all to establish long-term arrangements with our vendor base,” Ken Merchant, vice president for F-35 sustainment at Lockheed, said at an Air Force Association event in Maryland.

National Defense Magazine reported Tuesday the company aims to cut F-35’s cost per flying hour to less than $25K by 2025.

Lockheed also seeks to provide stability for suppliers and support the company’s goal of sustaining an 80 percent mission-capable rate for the U.S. Air Force’s F-35As through the proposed contract.

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