Pentagon Cuts Four Lockheed Jets From Next Order, Pentagon Says

The Pentagon has cut four F-35 jet fighters from its next contract with Lockheed Martin Corp. (LMT), in part to pay for cost overruns on the first three orders, a spokesman said tonight.

The U.S. Air Force and Navy had planned to buy a total of 34 jets in the fifth order, for which negotiations are still under way. The order is now for 30 aircraft, said Pentagon F-35 spokesman Joe DellaVedova in an e-mail.

The Air Force deleted three aircraft and the Navy one from the pending contract to help fund the overruns and costs associated with retrofits to the initial aircraft intended to correct glitches that have been revealed in flight testing, he said. These are so-called “concurrency costs.”

The first 28 aircraft are estimated to cost a total of $918 million more than anticipated. Lockheed Martin and engine subcontractor Pratt & Whitney, a unit of United Techologies Corp., are already paying $283 million of that amount, and the government the remaining $635 million, the program office said in July.

DellaVedova didn’t have the value of the four aircraft that are being removed from the fifth contract.

The aircraft reductions were necessary in part because the Senate Armed Services Committee denied a Pentagon request to shift a total of $264 million from other programs and unearned Lockheed Martin award fees to pay for the overruns and retrofits, he said.

Lockheed Martin spokeswoman Laurie Quincy didn’t immediately respond to an e-mail seeking comment.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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