Pentagon-Lockheed fight over F-35 price doesn’t extend to Pratt

U.S. Department of Defense

Sailors move an F-35C, the carrier version of the joint strike fighter, during sea trials aboard the USS Dwight D. Eisenhower last year.

Washington – The Pentagon and Lockheed Martin differed this week over the price of a ninth batch of F-35 Joint Strike Fighters, but Pratt & Whitney, which makes the engines for those planes, has successfully negotiated contracts for that lot and the next.

In April, Pratt & Whitney signed a contract with the Pentagon to produce the ninth lot of F-135 engines that will power the F-35. The contract, worth $1.4 billion, will cover 66 engines.

But things did not go as smoothly for the Pentagon when it came to the airplanes those engines will power. The Pentagon ended more than a year of talks with Lockheed Martin this week, saying it will impose a $6.1 billion price for the next batch of 57 planes for the U.S. military and some foreign air forces.

“After 14 months of good-faith negotiations, the government believed further negotiations would not result in an agreement on the total price of the LRIP (Low Rate Initial Production) contract,” said Joe DellaVedova, spokesman for the F-35 Joint Program Office.

The Pentagon used authority it had under terms of its negotiations with Lockheed Martin to impose a price of about $100 million for each air frame.

In a statement, Lockheed Martin expressed disappointment over the move and said it may take the Pentagon to court to secure a new deal.

The Pentagon must also negotiate with Lockheed Martin over the tenth lot of F-35s. Pratt & Whitney already has come to terms with the Defense Department for that lot too. In July, it awarded the company a $1.5 billion contract for the 10th lot of F-135s, a total of 99 engines. The company has delivered 291 F-135 engines to date.

“The propulsion system team has kept their word in delivering on their price reduction commitments for the F135 propulsion system, which is critical to making the F-35 more affordable for the U.S. military and our allies,” said Lt. Gen. Chris Bogdan, F-35 program executive officer.

But on Thursday, Sen. John McCain, R-Ariz, sent a letter to Defense Secretary Ash Carter that said  he is concerned about a new delay in completing development testing of the F-35 that will result in new cost overruns.

“I am extremely disappointed to learn of yet another delay in the completion of the System Development and Demonstration (SDD) phase of the F-35 Joint Strike Program with an associated cost overrun that may be upwards of $1 billion,” McCain wrote. “This latest setback appears to call into question some of the recent determinations and actions of Department of Defense senior leaders regarding the development of this critical but troubled program.”

The chairman of the Senate Armed Services Committee, McCain had included a requirement in last year’s defense authorization bill that the Pentagon re-evaluate the number of F-35s it wanted to buy.

Deputy Secretary of Defense Robert Work replied that “the focus of the department for the foreseeable future is to acquire F-35s at the highest rate affordable in our budget.”

“I am having difficulty reconciling the maintenance of the current requirement with the troubled performance, continued delays, and persistent cost overruns of this program,” McCain said.

He submitted 10 questions to Carter,  including when operational testing of the F-35 would be completed and what other military priorities will not receive funding because of delays and cost overruns in the F-35 program.

McCain also asked the Pentagon again when it would  provide “your final response either to revalidate the current requirement for the F-35 Joint Strike Fighter total program of record quantity or identify a new requirement for the total number of F-35 aircraft that the Department would ultimately procure.”