New F-35 Cost Target Slips Toward Goal

By Amy Butler
Source: Aviation Week & Space Technology

These estimates exclude the cost of retrofits to airframes that are required as a result of discoveries in flight testing that is running in parallel with LRIPs 6 and 7.

Based on a May report, the Pentagon estimates that airframes in LRIP 6 and 7 would require another $7.4 million for retrofits. The government and Lockheed have agreed to split the amount of those known retrofits at the time of contract signature. Any new problems that crop up in flight trials will require full payment by the government.

Adding up known engine costs, retrofit estimates and the target-unit projections, an F-35A in LRIP 6 would cost the U.S. government roughly $118.5 million and in LRIP 7, $114.5 million.

It remains to be seen whether Lockheed Martin will manage to fabricate the airframes on the cost targets laid out in LRIPs 6 and 7. As of March, program officials say, the airframes in LRIP 4 are being produced at about 7% higher-than-targeted price. However, the risk structure of the agreement protects the government from liability for such an overrun in the two newest lots.

This is the first deal signed between the Pentagon and Lockheed Martin since a massive leadership shift at the company put Marillyn Hewson at the helm. Then-CEO-in-waiting Christopher Kubasik abruptly exited late last year after details emerged about his extramarital affair with a company employee. His prospective second-in-command, Hewson, ascended. Kubasik was widely thought to have adhered to former CEO Robert Stevens's approach to F-35 negotiations; hashing out LRIP 5 took over a year. Hewson, by contrast, seems to have a more collaborative way of bargaining.

And since she has come onboard there have been changes in Fort Worth, Lockheed Martin Aeronautics' headquarters. The former sector president, Larry Lawson, left the company to become CEO of Spirit AeroSystems, and Orlando Carvalho, formerly the vice president overseeing the F-35, took his place. Lorraine Martin, formerly the F-35 deputy, now oversees the massive program.

LRIPs 6 and 7 will be the first contract for which Lockheed Martin assumes all responsibility for exceeding the target cost of the airframes, Rein says.

LRIP 6 includes 18 F-35As for USAF, six F-35Bs for the Marine Corps and seven F-35Cs for the Navy. Also included are three F-35As for Italy and two for Australia.

LRIP 7 includes 19 F-35As for USAF, six F-35Bs for the Marine Corps and four F-35Cs for the Navy. Also covered are another three F-35As for Italy, two F-35As for Norway and 1 F-35B for the U.K.

Projected F-35 LRIP 6 and 7 Costs (U.S.$millions)
Variant and Lot SizeTarget Airframe CostEstimated Retrofit Cost*Estimated Engine CostTotal Estimated Aircraft Cost
F-35A LRIP 5 (32)$105$10$14$124
LRIP 6 (36)100.87.414118.5
LRIP 7 (35)96.87.414114.5
F-35B LRIP 51131038156
LRIP 6108.57.438150.2
LRIP 7104.27.438145.9
F-35C LRIP 51251014144
LRIP 61207.414137.7
LRIP 7115.27.414132.9

Comments On Articles