Pentagon, Lockheed agree to decade-long F-35 framework deal for hundreds of jets

WASHINGTON — The Pentagon and defense giant Lockheed Martin announced today they reached a framework agreement covering a decade’s worth of F-35 Joint Strike Fighter production and sustainment, potentially inaugurating a transformative deal for the stealth jet’s enterprise — if lawmakers sign off and key questions are answered.

The framework covers at least 850 US aircraft over 10 production lots with initial spares and includes 10 years of sustainment and modification kits, according to press releases from the Pentagon and Lockheed. Breaking Defense first reported the two were in talks for a multi-year deal.

The Pentagon in its release said Lockheed will fund $7 billion worth of unspecified initiatives for the F-35 program as part of the agreement. Lockheed’s release says it will keep the tri-variant stealth jet’s production rate steady at 156 aircraft annually. 

“We have fundamentally changed how we stabilize the American defense industrial base to produce at speed and scale. This agreement with Lockheed Martin proves it,” Pentagon acquisition chief Michael Duffey said in the Defense Department’s release. “By aligning financial incentives with actual performance, we are ensuring our warfighters are equipped with the lethal capabilities they need to fight and win.” 

Lockheed CEO Jim Taiclet said in the company’s release that the framework deal “strengthens the way we can plan and invest in the F-35 enterprise” and that the agreement affords “greater certainty” to “make the upfront investments needed to expand capacity, improve efficiency and build a more resilient supply chain.”

The Pentagon under the Trump administration has pushed numerous framework deals for in-demand weapon systems like munitions in an effort to boost long-term production rates and secure cost savings, officials argue, through greater economies of scale. Yet unlike other frameworks announced by the Pentagon, today’s agreement does not increase the fighter’s manufacturing rate.

The announcements also do not address some key questions, like how much the initiative will cost taxpayers or how much the Pentagon expects to save by using the multi-year format.

According to Lockheed’s release, the company and the F-35 Joint Program Office “will work to finalize contract terms, pricing and schedules through a formal contract award” if lawmakers grant the requisite authority and accompanying appropriations. 

Any decade-long agreement would likely be worth tens of billions of dollars. A recent agreement for two lots of F-35 production included nearly 300 aircraft at a price of $24.3 billion.

Lawmakers are currently mulling multi-year authority for the F-35, which is operated by the Air Force, Marine Corps and Navy. The fiscal 2027 defense authorization bill helmed by the Senate Armed Services Committee, for its part, includes language that would permit the Pentagon to enter into multi-year procurement contracts for the F-35. The House version of the bill includes a similar provision, but with some additional guardrails. 

For one, the House bill would not authorize multi-year F-35 procurement until the defense secretary certifies that the contract also includes “the full complement of initial spare parts and alternate mission equipment for each aircraft to be procured under the contract.” The Pentagon must also demonstrate that the multi-year contract achieves cost savings of at least 5 percent.

Additionally, neither the Senate nor House version of the bill explicitly authorizes a multi-year sustainment agreement, potentially leaving a key piece of the broader proposal unresolved. And if history is any guide, a deal for the jet’s maintenance could prove a sticking point. 

The F-35 program previously explored a multi-year sustainment agreement in the form of a performance-based logistics (PBL) contract spanning five years. But no deal could be reached because officials could not satisfy a congressional requirement to demonstrate that the PBL would either reduce costs or increase readiness. 

Another potentially complicating factor is the F-35’s sprawling international profile, though a Lockheed spokesperson said the agreement “will not change the process for production slot allocation” shared among the jet’s buyers and would, if anything, save foreign customers money down the road.

“The Joint Program Office will maintain ownership of the production order for all F-35 customers,” the spokesperson continued. “F-35 international operators are an integral part of the global F-35 fleet, and this agreement will bring the benefit of economies of scale to their future purchase plans.”

The F-35 program is projected to last until the 2080s, and sustainment accounts for a vast portion of its nearly $2 trillion lifecycle cost estimate. Improving the jet’s mission capable rates is a leading focus for the program, as previous government watchdog reports have found that readiness hampered by a lack of depot capacity, shortages of spare parts and insufficient access for military maintainers to the jet’s technical data. 

Over 1,300 F-35s have been delivered to date. But over the last two years, many newly delivered jets have been held for training as officials struggle to clear a new upgrade for combat.