REFILE-Lockheed, Pentagon reach deal on 71 more F-35s-source

Mon Jul 29, 2013 6:53pm EDT

WASHINGTON, July 29 (Reuters) - Lockheed Martin Corp and the Pentagon reached agreement on Monday on orders for the next two batches of F-35 fighter jets, a deal worth over $7 billion, according to a source briefed on the discussions.

The deal covers 71 of the radar-evading planes, with 36 jets to be purchased in the sixth production lot, and 35 in the seventh. The agreement was negotiated without factoring across-the-board budget cuts imposed on the Pentagon in March, said the source, who was not authorized to speak publicly.

A second source familiar with the negotiations said Pentagon acquisition chief Frank Kendall had approved the broad outlines of the deal, which includes further reductions in the cost of the planes. The source had no immediate details on the cost per plane. The government negotiates separately with Pratt & Whitney, a unit of United Technologies Corp, for the plane's engines. Those talks are also expected to wrap up soon.

Lockheed is building three models of the F-35 for the U.S. military and eight international partner countries: Britain, Australia, Canada, Norway, Turkey, Italy, Denmark and the Netherlands. Israel and Japan have also ordered the jet.

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