Pratt Assumes Overrun Cost In Latest F135 Deal

By Guy Norris
Source: Aviation Week & Space Technology

The engine-maker reached a tentative agreement on LRIP 5 as far back as early 2012 and completed final LRIP 3 deliveries in the first quarter of last year, around the same time it started deliveries of the first LRIP 4 engine.

While Pratt has taken a big step in assuming all risk of a cost overrun in LRIP 5, Lockheed Martin is on a more methodical path. Under the terms of the LRIP 5 deal, signed late last year, the company must absorb 55% of any overruns up to a ceiling of 112% of the target cost, with the government picking up the remainder, says Joe Dellavedova, the F-35 spokesman. Overruns on the airframe were evenly split in LRIP 4 up to a cost ceiling of 120%. The company is pushing hard to reduce labor costs, in particular, for the airframe.

The Pentagon's most recently released engine pricing is from LRIP 3. In that lot, each conventional engine cost about $16 million and each short-takeoff-and-vertical-landing engine for the F-35B was priced at $38 million. Pratt & Whitney vowed to reduce the engine price by 10% in LRIP 4. Company officials refused to provide per-unit pricing for earlier LRIPs or the target cost for LRIP 5.

The award of LRIP 5—and the forthcoming LRIP 6, for which Pratt says it provided its proposal last summer—are later than anticipated. “We are working closely with the government to improve and accelerate the contracting cycle for future production lots of propulsion systems,” says Chris Flynn, vice president for F135/F119 engine programs. Dellavedova says a combined deal for LRIPs 7 and 8 is slated for closure early in 2014.

In a statement marking the LRIP 5 award release, Flynn adds that “key factors in driving down cost will be to increase the ramp rate and volume of engines. Achieving greater program stability will help us to progress further down the cost curve to meet the price-reduction objectives on the program.”

So far the F135 has powered almost 3,120 flights, achieving 4,920 flight-test hours on the F-35 fleet. A total of more than 26,000 development and flight-test hours have been logged by the engine, which was derived from the F119 developed for the now out-of-production F-22.

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