New framework agreement for multiyear F-35 production and sustainment

The Department of War and Lockheed Martin unveiled a transformative framework agreement for multiyear F-35 Lightning II production and sustainment. This framework includes 850 U.S. aircraft over 10 years with associated initial spares, 10 years of modification kits and sustainment, and international customer orders across Lots 21-30, at a continued production rate of 156 aircraft per year.

"This multiyear framework strengthens the way we can plan and invest in the F-35 enterprise," said Lockheed Martin Chairman, President and CEO Jim Taiclet. "With the greater certainty that comes from the U.S. government's transformative approach to F-35 production and sustainment, we can make the upfront investments needed to expand capacity, improve efficiency, and build a more resilient supply chain. That's good for the taxpayer, good for our suppliers and, most importantly, good for the United States and its allies."

If granted multiyear authority and associated appropriations in the coming months, the F-35 Joint Program Office and Lockheed Martin will work to finalise contract terms, pricing, and schedules through a formal contract award, which will fulfil the government's imperative for a predictable, affordable, and resilient fighter jet enterprise. This effort is expected to save taxpayers billions of dollars over F-35's lifecycle through long-term pricing and industry volume discounts.

The framework agreement directly addresses Department of War and Congressional priorities to improve F-35 readiness by:

– Providing predictable, multiyear procurement planning that eliminates the need for supplemental appropriations for, obsolescence management and production tooling.

– Delivering high-volume procurement efficiencies and discounts that translate into tangible taxpayer savings.

– Ensuring transparent, data driven decision-making through integrated analytics that link budget inputs to readiness outcomes.

– Providing real-time visibility into parts inventory and readiness metrics through integrated analytics.

Highlights

– Supply Chain Stability, Predictable demand from long-term contracts with suppliers will enable bulk procurement of raw materials and critical parts, slashing turnaround times and reducing logistics bottlenecks. This will result in better mission capable rates by eliminating the annual contracting cycle that has historically strained the industrial base.

– Affordability, The integrated procurement model that pairs aircraft production with purchases of spare and modification parts will deliver high-volume procurement discounts, drive down unit prices and provide the U.S. government the cost predictability it requires.

– Economic Impact, The programme will support 317,000 U.S. jobs and generate approximately $79 billion in annual economic activity over the next decade, strengthening the nation's industrial base and providing long-term stability for suppliers who have struggled to plan under the previous resourcing model.

– Readiness, This framework adds investments in industry capacity and logistics that build upon Lockheed Martin's existing investments that inject parts into the global spares pool and will further improve fleet readiness and rapid repair turnaround for operations.

– International Benefits, The multiyear procurement model enables economies of scale that lower costs and enhance readiness for all F-35 customers, reinforcing confidence in the global sustainment network and enhancing interoperability across allied fleets.

"Our new multiyear framework gives suppliers stability to plan for the future and invest with confidence, improving readiness across the F-35 fleet," said OJ Sanchez, president of Lockheed Martin Aeronautics. "This, in addition to the investments Lockheed Martin is making to the global spares pool, will directly translate into higher mission capable rates and a more resilient supply chain, critical capabilities the warfighter needs to meet today's mission and prepare for tomorrow's threats."