Lockheed, Pentagon agree on next F-35 lots as costs rise and production complexities grow

Lockheed Martin and the Pentagon’s F-35 Joint Program Office (JPO) have reached a handshake deal for Lots 18 and 19 of the F-35 Joint Strike Fighter, covering approximately 300 aircraft, reports Air & Space Forces Magazine. Finalized details, including unit costs, remain under negotiation, but inflation, reduced purchase volumes, and technical upgrades suggest a significant cost increase from previous lots. The last contract, finalized in 2022, averaged $82.5 million per F-35A, with costs expected to rise by roughly $6.6 million, or 8 percent, per jet.

The delay in negotiations led Lockheed to self-fund $700 million to maintain production and stabilize its supply chain. Deliveries of F-35s outfitted with the new Tech Refresh 3 upgrade resumed in July after a yearlong hold to resolve software issues. TR-3 comprises advanced hardware and software designed to enhance the fighter’s computing power, sensors, and mission capabilities, laying the foundation for to-come Block 4 improvements.

The Pentagon has also begun preparations for Lot 20, issuing an $870 million contract for parts procurement.

International interest in the F-35 remains robust, with Romania becoming the twentieth nation to select the fighter. Lockheed aims to deliver 90 to 110 jets in 2024, increasing to more than 156 annually by 2025, as it works toward the enhanced Block 4 configuration.