Lightning Bargains

Lockheed Martin will likely quote a price for the fourth production lot of F-35 strike fighters that is “about 20 percent below” the estimate developed by the Pentagon’s cost assessment and program evaluation group, company CEO Bob Stevens told reporters Thursday in Arlington, Va. Stevens said Lockheed Martin has managed to cut the unit cost of the F-35 by 50 percent over the first several production lots, and is so confident that it can meet the target the company “will likely take a fixed-price incentive-type contract for Lot 4.” Accepting a fixed-price incentive fee deal at this point would be two years earlier than the previous plan, he said. The confidence stems from cost “actuals” from building the first production examples, and success in hitting this year’s flight test targets and learning curve, said Dan Crowley, aeronautics division chief operating officer and former F-35 program manager. A “handshake deal” with the government on Lot 4 is only a couple of weeks away, Crowley said. Lot 4 is for 32 aircraft; Lot 5 will be for 42 of the fighters.