• Lockheed Martin F-35 production line at Fort Worth in Texas. Both BAE Systems Australia and Northrop Grumman Australia are subcontractors on the F-35 program, providing in-roads to their respective supply chains. Credit: Lockheed Martin (Angel DelCueto)
    Lockheed Martin F-35 production line at Fort Worth in Texas. Both BAE Systems Australia and Northrop Grumman Australia are subcontractors on the F-35 program, providing in-roads to their respective supply chains. Credit: Lockheed Martin (Angel DelCueto)
  • Lockheed Martin's F-35 production line. Credit: Lockheed Martin
    Lockheed Martin's F-35 production line. Credit: Lockheed Martin
  • F-35 JPO executive director LTGEN Chris Bogdan and JSF Divison head AVM Leigh Gordon at the briefing held at Avalon Airshow. Credit: ADM (Patrick Durrant)
    F-35 JPO executive director LTGEN Chris Bogdan and JSF Divison head AVM Leigh Gordon at the briefing held at Avalon Airshow. Credit: ADM (Patrick Durrant)
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Lockheed Martin plays hardball on costs for next F-35 lot

By Patrick Durrant | Sydney | 8 March 2018
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In a press briefing given recently to US defence reporters in Washington DC, US F-35 Program Director Vice Admiral Mat Winter conceded costs put forward by Lockheed Martin for Lot 11 were not low enough and the contractor was not being as collaborative and as cooperative as he had hoped.

VADM Winter's team is currently engaged in protracted negotiations with the world's largest defence contractor. He had hoped to have the deal finalised by the end of last year but told reporters the current US$94 million to US$120 million cost per jet was too high and could become unaffordable.

“They could be much more cooperative and collaborative. We could seal this deal faster. We could. They choose not to, and that’s a negotiating tactic.”

Speaking at Avalon 2017 last year, former program director Lieutenant General Christopher Bogdan said: “Our promise to the enterprise has always been that an A model bought in 2019 would cost US$85 million - well I'm here today to tell you that's not enough – we need the airplane to be lower than that and I think we can get there.”

VADM Winter has ordered a Deep Dive Initiative into the costs of the top 100 suppliers, who produce about 85 per cent of the value of the plane, to determine how much it actually costs to build an F-35.

The U.S. Marines F-35B Lightning II fighter jet makes its first operational deployment aboard the amphibious assault ship USS Wasp (LHD-1), as part of the 31st MEU. Filmed during Spring Patrol 2018 on March 5, 2018. Credit: Gung Ho Vids via YouTube

The admiral has also said the US Government will begin shifting work on 68 aircraft subsystems from contractors to government depots so industry can focus on production.

Although VADM Winter wouldn’t share the Pentagon’s target price for Lot 11; he confirmed it will be lower than what was paid for Lot 10 (a US$94.3m average per jet). Lot 11, which hasn't been delayed by the lengthy negotiations, will mark an increase in production, with 130 aircraft due for delivery. In comparison, when completed by the end of 2018, Lot 10 (of which eight RAAF F-35As form a part) will have delivered 105 aircraft. The RAAF will receive eight F-35As as part of Lot 11.

This week US Marine Corps F-35Bs deployed to the amphibious carrier USS Wasp for the first time.

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