{"id":17244,"date":"2016-08-12T12:11:56","date_gmt":"2016-08-12T12:11:56","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2016\/08\/12\/pentagon-grants-lockheed-about-1b-to-stem-f-35-lot-9-production-costs\/"},"modified":"2026-08-07T21:37:46","modified_gmt":"2026-08-07T21:37:46","slug":"pentagon-grants-lockheed-about-1b-to-stem-f-35-lot-9-production-costs","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/breaking-news\/2016\/08\/12\/pentagon-grants-lockheed-about-1b-to-stem-f-35-lot-9-production-costs\/","title":{"rendered":"Pentagon Grants Lockheed About $1B To Stem F-35 Lot 9 Production Costs"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 With F-35 contract negotiations stretching on, the US Defense Department in August approved about $1 billion in additional funding to reimburse joint strike fighter manufacturer Lockheed Martin for costs incurred on the ninth batch of aircraft, sources with knowledge of the program said Thursday.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The move provides some financial relief to the company, which had been paying out of pocket for expenses associated with low-rate initial production (LRIP) lots 9 and 10. Last month, Lockheed&#8217;s chief financial officer, Bruce Tanner, said the company\u00a0had spent nearly $1 billion of its own funds to compensate suppliers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the F-35 program executive office declined to confirm how much money had been obligated to the company, joint program office (JPO) spokesman Joe DellaVedova told Defense News that &#8220;with what we have provided, Lockheed will be able to continue the LRIP 9 production without bearing any undue burden.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The JPO obligated the funding through an already existing\u00a0undefinitized contract action\u00a0(UCA)\u00a0for the ninth batch of LRIP aircraft. It is now negotiating with Lockheed on a separate UCA that would provide some cash for LRIP 10 if a final contract is not agreed to by then, DellaVedova said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;We appreciate the actions taken by the JPO to ensure delivery of F35s to our warfighter customer,&#8221; Lockheed spokesman Mark Johnson said in an email.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">The Defense Department issues UCAs in cases where it needs a vendor to perform work before the final terms of a contract have been set in stone. Lockheed had already collected $625 million through the LRIP 9 UCA, announced Nov. 3. The agreement has a not-to-exceed value of $5.37 billion, meaning that the government could use it to inject even more cash at a later date.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DellaVedova declined to comment on the timing and potential value of an\u00a0LRIP 10 UCA.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">During a quarterly earnings call in July, Lockheed executives said the company could not sustain paying the costs of the F-35 program with its own funds. Either a final deal on LRIP 9 and 10 \u2014 which the Pentagon has said is worth approximately $14 billion for more than 140 aircraft \u2014 or a UCA would be necessary to provide relief.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;If we don&#8217;t either get funding through a funding mechanism such as a UCA funding item or we definitize the contracts, we will not be able to continue and have that level of cash outflow as a corporation,&#8221; Tanner said then. &#8220;We simply don&#8217;t have that capacity. The Pentagon clearly knows that situation, and I&#8217;m optimistic that we&#8217;re going to get cash soon.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DellaVedova stressed that the JPO did not obligate additional LRIP 9 funding in response to Tanner&#8217;s statements. The office started the process to increase the value of the UCA in June, he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;The F-35 joint program office manages the program. We know the cost. We know the technical issues with the program,&#8221; he said. &#8220;And working with industry partners, we know what it takes to deliver aircraft. So we knew that additional funds would be needed to cover the work for the LRIP 9 jets and so we took action to provide funds so there was no undue burden upon the company.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Asked whether the UCA funding signified that LRIP 9 and 10 negotiations will continue to drag on, DellaVedova demurred.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;We want to ensure the continued production of F-35s while we continue to negotiate a fair deal,&#8221; he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The JPO initially predicted it would have a final contract in hand early this year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Email: <a href=\"mailto:vinsinna@defensenews.com\">vinsinna@defensenews.com<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Twitter: <a href=\"https:\/\/twitter.com\/ValerieInsinna\">@ValerieInsinna<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Pentagon obligated about $1 billion to reimburse Lockheed Martin for costs associated with the ninth batch of F-35s.<\/p>\n","protected":false},"author":7,"featured_media":35459,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":37,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[37],"tags":[],"coauthors":[3384],"class_list":["post-17244","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking-news"],"acf":{"subheadline":"","legacy_arc_id":"UUWGXT2U35FHTPH5KSZGLGNIYM","arc_canonical_url":"\/breaking-news\/2016\/08\/12\/pentagon-grants-lockheed-about-1b-to-stem-f-35-lot-9-production-costs\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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