Lockheed Said to Reach Accord With Pentagon on 71 F-35s-

Lockheed Martin Corp. reached an agreement in principle today with the Pentagon to sell 71 more F-35 fighters in two contracts valued at as much as $7 billion, according to two people familiar with the deal.

The Pentagon will release as early as tomorrow a statement disclosing what one of the people called a handshake agreement that didn’t set final prices or terms and conditions. The people spoke on condition of anonymity in advance of the official announcement.

The details will be worked out by the end of August, the person said. The deal for the next two contracts -- lots six and seven of the initial production phase -- had been predicted by Pentagon officials and by Marillyn Hewson, chief executive officer of Bethesda, Maryland-based Lockheed. The fifth contract, for 32 planes, was valued at as much as $3.8 billion.

“We believe we can have a negotiation settlement” by May 31, “followed by final contract award in June,” Air Force Lieutenant General Christopher Bogdan, the program manager, had said in written testimony submitted April 25 to a Senate Armed Services Committee panel.

Pentagon officials were able to negotiate the price down enough to buy the planned number of aircraft within the constraints imposed by the budget-cutting process called sequestration, one of the people said.

The agreement on the F-35 was reported earlier today by Reuters.

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