Lockheed Martin and the U.S. Department of Defense (DOD) reached an agreement in principle to fund the next two low-rate initial production (LRIP) lots of the F-35 Joint Strike Fighter, comprising 71 aircraft. The company and DOD jointly announced the “handshake agreement” on July 30 in advance of signing the LRIP contracts, which will provide consecutive, 4-percent reductions in the unit cost of U.S. military variants, they said. The parties said they will release cost details when the contracts are finalized.
Low rate initial production
Responding to a requirement of the Fiscal Year 2013 defense authorization act, U.S. military services declared their planned initial operational capability (IOC) dates for the three variants of the Lockheed Martin F-35 Joint Strike Fighter (JSF) on May 31. The legislation required the services to establish IOC dates by June 1.
The acquisition cost of F-35s for the international partners is bound to be affected by the slowdown in U.S. production, Dave Scott, Lockheed Martin’s director for international F-35 customer engagement, told AIN. “But we’ll still be doing about 30 in each of the next few years for the U.S., and when you add orders that have already been confirmed by the partners plus Israel and Japan, it’s not a bad annual rate,” he continued.
The first two production Lockheed Martin F-35s for operational training have been delivered to Eglin AFB, Florida, about one year behind schedule. F-35As AF-9 and AF-8, the first deliveries from low-rate initial production (LRIP) Lot 2, flew to the Florida base on July 14 and 20, respectively.
On November 19, Lockheed Martin received a $3.5 billion contract modification to build 31 F-35 Joint Strike Fighters for the fourth low-rate initial production (LRIP) batch. Together with earlier long-lead funding, this brings the contract value for LRIP-4 to $3.9 billion. The batch comprises 10 F-35A CTOL aircraft for the U.S.
Having been dogged by cost overruns, Boeing's avionics modernization program (AMP) for the C-130 Hercules has passed its Defense Acquisition Board Milestone C, allowing low-rate initial production (LRIP) to begin. The AMP provides an integrated avionics system to prolong the useful career of the U.S. Air Force's legacy Hercules fleet, and includes full night-vision-goggle compatibility, glass cockpits and digital systems.
The average unit production cost (APUC) for the F-35 is now predicted to be as high as $112 million in current dollars, according to a Pentagon review of the program conducted later last year, which led to a restructuring of the program. The APUC estimate does not amortize the cost of system design and development (SDD). That cost has now risen by $3.2 billion, to $53.2 billion.
Although the Pentagon last month declared that it was increasing the early production tempo of the F-35, the decision to buy 30 aircraft next year does not actually change previous plans. Moreover, there is still no U.S. commitment to multi-year procurement (MYP) before 2015. Mindful of repeated criticism by the U.S.