Lockheed Martin and Pentagon officials confirmed Sept. 22 that the company has reached an agreement with the Pentagon on the highly anticipated buy of 32 F-35 Joint Strike Fighters, known as the low rate initial production lot 4 (LRIP-4).

The contract is expected to be valued at more than $5 billion, said Lockheed spokesman John Kent.

While the deal has not been formally signed, Kent confirmed that negotiations for the planes are over and that on Sept. 21, the two organizations reached an agreement for the 32 jets, their production tooling and sustainment.

"The negotiated price is below the independent cost estimate prepared earlier this year and reflects the contract type deemed most efficient by the Department," a Pentagon statement said. "The Department believes this contract is a fair and reasonable basis for LRIP-4 and sets the appropriate foundation for future production lots."

Officials from both organizations have said that the 32 jets will cost as much as 20 percent less than the DoD's December prediction that the planes would cost roughly $76 million each in 2010 dollars over the program's lifetime.

The fixed-priced LRIP-4 deal is seen as critical to Lockheed's ability to deliver the jets on time and on budget.

Since early summer, Lockheed officials have indicated that the deal has been close to signing. Last week, Tom Burbage, the company's vice president of F-35 operations, blamed the delays on tough bargaining stances by both sides over the cost of the jets.

source: Defense News