October 14, 2014 / 9:21 PM / 5 years ago

Pratt & Whitney signs $592 million deal with Pentagon for next F-35 engines

WASHINGTON (Reuters) - Pratt & Whitney, a unit of United Technologies Corp (UTX.N), has been awarded a $592 million contract with the Pentagon for a seventh batch of F135 engines to power the F-35 fighter plane built by Lockheed Martin Corp (LMT.N), the Defense Department said on Tuesday.

The contract will cover 36 engines, and should be followed in coming weeks with a contract for an eighth batch of additional engines. Together, the two contracts will be valued at well over $1 billion, according to sources familiar with the agreement.

Top Pentagon officials had expected to reach agreement on the contracts earlier this summer, but negotiations were delayed after the engine on an Air Force F-35 failed during takeoff from a Florida air base on June 23. The incident led to the grounding of the entire F-35 fleet for several weeks.

Pratt has been working closely with the Pentagon and airworthiness authorities at the Navy and Air Force to examine the cause of the engine failure and test a proposed fix.

Pentagon officials are negotiating a separate contract with Lockheed that is worth about $4 billion for an eighth batch of the most advanced U.S. warplanes. Lockheed and government officials told Reuters last month that they expected to reach agreement on that contract within days or weeks.

The Pratt contract was included in a daily digest of major defense contracts.

Reporting by Andrea Shalal; Editing by G Crosse and Jonathan Oatis

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