U.S. DOD, Lockheed Martin finalize eighth F-35 LRIP

The eighth Low Rate Initial Production (LRIP) contract for 43 F-35 airframes is valued at $4.7 billion and reflects an average unit cost 3.5% lower than the LRIP 7 contract.

The U.S. Department of Defense (DOD) and Lockheed Martin (Ft. Worth, Texas, USA) reported on Nov. 24 that they have finalized the eighth F-35 Low Rate Initial Production (LRIP-8) contract today for 43 F-35 Lightning II airframes valued at $4.7 billion, including $0.5 billion of Advance Procurement funding that was announced at the time of award. The 43 airframes include 29 jets for the United States and 14 for five international countries. This agreement reflects an average airframes unit cost approximately 3.5 percent lower than the LRIP 7 contract signed in 2013 and a 57 percent reduction since LRIP 1.

U.S. LRIP 8 per variant airframe unit prices (not including engine cost) is as follows:

  • 19 F-35A CTOL – U.S. Air Force – $94.8 million/airframe
  • 6 F-35B STOVL – U.S. Marine Corps – $102.0 million/airframe
  • 4 F-35C CV – U.S. Navy (3) and U.S. Marine Corps (1) – $115.7 million/airframe

NOTE: F-35 engines are funded through separate contract actions with Pratt & Whitney.

The LRIP 8 contract procures 29 U.S. airframes including 19 F-35As, six F-35Bs and four F-35Cs. It also provides for the production of the first two F-35As for Israel and the first four F-35As for Japan, along with two F-35As for Norway and two F-35As for Italy. The United Kingdom will receive four F-35Bs. The contract also funds manufacturing-support equipment as well as ancillary mission equipment. Lockheed Martin will begin delivering LRIP 8 aircraft in early spring 2016. Once production of LRIP 8 aircraft is completed, more than 200 F-35s will be in operation by eight nations.

LRIP 8 contract terms continue to eliminate the government’s exposure to risk by having Lockheed Martin cover 100 percent of any cost overruns. The government and Lockheed Martin will share returns derived from any underruns in target cost (20 percent for government and 80 percent for Lockheed Martin). The contract also includes a concurrency clause that requires Lockheed Martin to share costs equally with the government (50/50) for known concurrency changes arising from System Development and Demonstration testing and qualification. Newly discovered concurrency changes identified during the LRIP 8 production period will be authorized via engineering change proposals.

The LRIP 8 contract contains performance-based payments, whereby the contractor will receive incremental payment as specified performance criteria are achieved along the production line until government aircraft acceptance.

As of November, 115 F-35s, including test aircraft, were delivered from Lockheed Martin's production facility in Fort Worth, Texas. The U.S., eight partner nations, and three foreign military sales customers have announced plans to procure more than 3,200 F-35 aircraft over the life of the program.