NATIONAL HARBOR, Maryland Lockheed Martin Corp (LMT.N) executives on Tuesday said they saw a good chance of a multibillion dollar five-year deal that would allow the Pentagon to buy 79 more C-130J cargo planes from fiscal 2014 to 2018, despite current U.S. budget woes.
Lockheed expects to be able to move forward with the multiyear purchase agreement that would generate savings of at least $600 million for the U.S. government, said Lawrence Gallogly, business development director for Lockheed's Air Force air mobility programs.
"All indications are positive on the customer side and in Congress," Gallogly told Reuters at the annual Air Force Association conference.
He said Lockheed hoped to move ahead with the deal as long as Congress did not rely on temporary spending measures to fund the government for the entire fiscal 2014 year. Temporary spending measures, known as continuing resolutions, do not generally allow the start of new acquisition programs.
Gallogly said the Pentagon's Cost Accounting and Program Evaluation office had validated savings of at least 10 percent on the proposed multiyear agreement, and Lockheed believed additional savings were possible, versus buying the airplanes one year at a time.
Given increasing budget constraints, the savings generated by such a deal would allow the Pentagon to put additional funds into other programs, he said.
Jack Crisler, vice president of new business for Lockheed's air mobility, special operations and maritime programs, said Lockheed was building 24 aircraft a year, and expected to continue building the plane well into the 2020-2025 timeframe.
He said Lockheed had sold the C-130 to 14 countries, and expected to sell "in excess of 200" more J-model airplanes to foreign countries. The Pentagon has already approved sales to India, Libya, Saudi Arabia and Egypt, but additional possible buyers had also expressed interest, Crisler said.
(Corrects paragraph five spelling to Gallogly instead of Gaggogly)
(Reporting by Andrea Shalal-Esa; editing by Andrew Hay)