Lockheed Martin, headquartered in Bethesda, Maryland, has entered an initial production and sustainment agreement with the Department of Defense covering at least 850 F-35 Lightning II fighter jets over the next 10 years, with annual output expected to hold steady at 156 aircraft. The framework, announced Thursday, also folds in international orders, initial spares, modification kits and long-term sustainment work — but it stops short of being a signed contract.
A Framework, Not Yet an Order
According to a report from Reuters, the agreement covers international F-35 orders, initial spares and modification kits, and the F-35 is described in that coverage as the world's most advanced fighter jet, built with stealth technology that allows it to evade enemy detection. Lockheed itself frames the deal as a prearranged long-term arrangement rather than an actual order, per the original reporting from the Maryland Daily Record. The company said that if it is granted multi-year procurement authority 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.
Per a Lockheed Martin news release, this framework includes 850 U.S. aircraft over 10 years at a continued production rate of 156 aircraft per year. The company estimates the arrangement will support 317,000 U.S. jobs and generate approximately $79 billion in annual economic activity over the next decade. The release notes that predictable demand from long-term supplier contracts will enable bulk procurement of raw materials and critical parts — a stabilization effort the company hopes will ease constraints that have dogged the program's supply chain.
Lockheed Putting Up $7 Billion of Its Own
Lockheed Martin will self-fund at least $7 billion in initiatives supporting the F-35 program, according to the Maryland Daily Record's account of a department statement. Separately, the industry outlet Breaking Defense reports Lockheed will fund $7 billion worth of unspecified initiatives for the program, and that the money is expected to cut down on late or low quality deliveries of product to Lockheed's production line in Fort Worth, Texas, as detailed by Breaking Defense.
Under Secretary of Defense Michael Duffey said the agreement changes how the American defense industrial base is stabilized to produce at speed and scale. Duffey also said that aligning financial incentives with actual performance will equip warfighters with the capabilities needed to fight and win, according to the Maryland Daily Record's reporting on the announcement.
Where the Deal Fits in F-35 History
The framework, as outlined by FlightGlobal, covers US and international orders across Lots 21-30 — a sweep of production batches that would follow the Pentagon's most recent completed deal. That prior agreement, covering two lots of nearly 300 aircraft, was priced at $24.3 billion, Breaking Defense reported. Air & Space Forces Magazine has reported separately that the Pentagon awarded Lockheed Martin a contract last summer for 296 airframes in Lots 18 and 19, valued at $24.29 billion, while a related $3.8 billion contract modification covered F135 engines from Pratt & Whitney, whose five-year, $1 billion investment in production capacity has boosted engine output by 20 percent, according to Air & Space Forces Magazine. Combined, that earlier round put the average cost of an F-35 airframe and engine at somewhere around $105 million, the outlet estimated.
Lockheed and its peers across the US have benefited from increased global defense spending as geopolitical conflicts remain unabated, the Reuters report noted. More than 1,300 F-35s have been delivered to date, Breaking Defense reported, while Lockheed's own release puts the figure at more than 1,375 fielded worldwide, with the global fleet having surpassed a million flight hours. The program is projected to last until the 2080s, according to Breaking Defense, which also cited an estimated lifecycle cost of nearly $2 trillion.
Sustainment Questions Linger
Even as Lockheed and the Pentagon tout the framework's promise of stability, the Government Accountability Office has flagged ongoing concerns with the jet's upkeep. The F-35 is the Department of Defense's most costly weapon system, but it hasn't met performance goals and costs to sustain the aircraft continue to increase, the Government Accountability Office has found. No formal contract value for the new 10-year framework has been disclosed, and the arrangement still requires multiyear procurement authority and associated appropriations before it can convert into a binding award.
