(Adds savings on engines, other negotiations, byline)
By Andrea Shalal
WASHINGTON Jan 15 Engine maker Pratt & Whitney
has reached an agreement with the Pentagon about two separate
contracts to build 167 engines to power the F-35 fighter jet
built by Lockheed Martin Corp, the company and Pentagon
said in a joint statement.
The statement did not include the value of the two contracts
- a ninth batch of 66 engines and a 10th batch of 101 engines -
because details will only be finalized in coming weeks.
However, a source familiar with the matter said the two
deals, which also include engineering support, spare parts and
program management, would be worth more than $3 billion to
Pratt, a unit of United Technologies Corp.
"This agreement for the next two lots of F135 engines
continues to drive down costs and that's critical to making the
F-35 more affordable for the U.S. military and our allies," said
Air Force Lieutenant General Chris Bogdan, who runs the $391
billion program for the Pentagon. "We are ramping up production
and witnessing tangible results."
The Pentagon's F-35 program office and the company said the
agreement would lower the price of the 140 engines used for the
conventional takeoff version of the jet, and the carrier variant
by 3.4 percent from the previously negotiated price.
The price of the 27 engines that will power the short
takeoff and landing version of the jets was reduced by 6.4
percent from the previous contract, according to the statement.
The eighth batch of engines had cost 3.5 percent to 4.5
percent less than the previous batch.
Pratt had hoped to reach agreement on the two new contracts
before the end of last year, but negotiations dragged on longer
Lockheed continues to negotiate with the Pentagon about two
separate contracts to build about 160 F-35 fighter jets for $15
Company and Pentagon officials had also hoped to finalize
those deals last year, but sources familiar with the discussions
now say it may take a month or more to reach agreement.
Bogdan has set a goal of reaching a price tag of $80 million
to $85 million per aircraft, including the engine, by 2019.
Lockheed is developing three versions of the stealthy,
supersonic fighter jet for the U.S. military and key U.S. allies
and nine other countries that have already ordered jets:
Britain, Australia, Turkey, Italy, Norway, the Netherlands,
Japan, South Korea and Israel.
(Reporting by Andrea Shalal; Editing by Chris Reese and Lisa