Lockheed, Pentagon set lower-cost F-35 deal that preserves jets

WASHINGTON, July 30 Tue Jul 30, 2013 11:48am EDT

WASHINGTON, July 30 (Reuters) - Lockheed Martin Corp and the Pentagon on Tuesday said they reached an agreement for 71 more F-35 fighter jets, with lower pricing allowing the government to buy all the planes it had planned despite budget cuts that took effect in March.

In a joint statement, Lockheed and the F-35 program office said the agreement covers 36 jets in a sixth batch, with each warplane to cost about 4 percent less than the previous lot, and 35 jets in a seventh batch, also at a 4 percent discount. Analysts say the two contracts will be worth over $7 billion.

The statement said details would be released later, but the lower cost of the planes, coupled with lower prices on a number of other smaller contracts, would "allow the Pentagon to buy all the aircraft originally planned, including those that were in jeopardy of being cut as a result of mandatory budget cuts imposed on the Pentagon in March."

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