Lockheed Martin's F-35 fighter program gets $34 billion Pentagon contract, its biggest yet

Key Points
  • The Pentagon announced a $34 billion F-35 contract with Lockheed Martin, the largest contract yet for the defense company's costly fighter program.
  • The deal is for the delivery of 478 of the aircraft.
  • The Pentagon touted reduced costs in its announcement Tuesday.
Lockheed Martin's F-35 Lightning II fighter jet at a ceremony on
Lockheed Martin

WASHINGTON — The Pentagon on Tuesday announced a $34 billion F-35 contract with Lockheed Martin, the largest contract yet for the defense company's costly fighter program.

The deal is for the delivery of 478 of the aircraft.

The F-35, the crown jewel in the defense giant's portfolio, has become one of the most challenged programs in the history of the Department of Defense. The laundry list of setbacks includes faulty ejection seats, software delays and significant helmet-display issues. The program had an initial acquisition cost of $406.5 billion.

Yet the Pentagon touted reduced costs and a quicker timetable in its announcement Tuesday.

"This agreement achieves an average 12.7% cost reduction across all three variants and gets us below $80 million for a USAF F-35A by Lot 13 – one lot earlier than planned," Air Force Lt. Gen. Eric Fick, F-35 program executive officer, said Tuesday.

Lockheed Martin's fifth-generation F-35 comes in three variants, the F-35A for the U.S. Air Force, F-35B for the U.S. Marine Corps and F-35C for the U.S. Navy.

"The $34 billion agreement for F-35 low-rate initial production lots 12-14 includes the delivery of 478 F-35 aircraft," Ellen Lord, undersecretary of Defense for acquisition and sustainment, said Tuesday at the Pentagon.

The contract announced Tuesday covers three lots of orders: 12, 13 and 14. Each one is essentially a batch of aircraft. The deal for lot 12 was for 149 jets, 160 for lot 13 and 169 for lot 14, for a total of 478 fighters for the U.S. military and allied partners.

Lord reiterated the department's commitment to the F-35 program at the Pentagon.

"I have full faith and confidence in the F-35 program and our ability to delivery F-35 combat capability anywhere in the world. Make no mistake, the F-35 is the world's most advanced, lethal and interoperable aircraft ever developed," she said.

Aviation Boatswain's Mate 3rd Class Juan Cumpston directs an F-35C Lightning II carrier variant to the catapult on the flight deck of the aircraft carrier USS George Washington.
U.S. Navy photo

The latest deal comes as the U.S. withdraws Turkey's participation in the F-35 program after Ankara brokered a multibillion-dollar deal with Russia for a missile system.

"There has been no change to return Turkey to the F-35 program. The S-400 air defense system, which is incompatible with the F-35, remains in Turkey," Lord said. "As I've said previously, Turkey makes nearly 1,000 parts for the F-35 and will continue to do so until Turkey's F-35 supply chain responsibilities transfer at the end of March in 2020."

In 2017, Ankara brokered a deal reportedly worth $2.5 billion with the Kremlin for the S-400 despite warnings from the U.S. that buying the system would come with political and economic consequences.

The S-400, the successor to the S-200 and S-300 missile systems, made its debut in 2007. Compared with U.S. systems, the Russian-made S-400 is believed to be capable of engaging a wider array of targets, at longer ranges and against multiple threats simultaneously.

In multiple efforts to deter Turkey from buying the S-400, the State Department offered in 2013 and 2017 to sell the country the Raytheon's Patriot missile system. Ankara passed on the Patriot both times because the U.S. declined to provide a transfer of the system's sensitive missile technology.

All the while, Turkey became a financial and manufacturing partner in the F-35 jet.

Earlier this year, the White House said it made "multiple offers to move Turkey to the front of the line to receive the U.S. Patriot air defense system," which CNBC reported in April.

"Unfortunately, Turkey's decision to purchase Russian S-400 air defense systems renders its continued involvement with the F-35 impossible. The F-35 cannot coexist with a Russian intelligence-collection platform that will be used to learn about its advanced capabilities," the White House said in a July 17 statement, adding there will be "detrimental impacts" on Turkey's participation in NATO.

Multibillion-dollar weapons sale between U.S., Turkey and Russia gets far more complicated