Lockheed in $424 million F-35 Pentagon contract

The radar-evading warplane is the U.S. military's biggest acquisition program, projected to cost up to $382 billion for 2,457 aircraft through 2036.

The add-on combines purchases for the U.S. Navy ($62 million; 15 percent), U.S. Air Force ($135.7 million; 31 percent), U.S. Marine Corps ($194.5 million; 46 percent), and international partners ($32.2 million; 8 percent), the Pentagon's daily contract digest said.

The deal, of a type called cost-plus-incentive-fee, applies to a previously awarded advance contract for sustaining the fourth batch of low-rate initial production, the announcement said.

Lockheed Martin, the Pentagon's No. 1 supplier by sales, is continuing negotiations with the Defense Department for the underlying sale of 32 F-35s that could be worth billions of dollars, said Joseph LaMarca, a company spokesman.

Robert Stevens, Lockheed's chief executive, told the Reuters Aerospace and Defense Summit in Washington last week that an agreement on this fourth batch could come "any day now."

The fourth lot is to introduce a fixed price contract structure two years earlier than initially planned as part of Pentagon budget belt-tightening. Previous such contracts have guaranteed Lockheed would cover its costs plus be eligible for incentive fees.

More than $4 billion has been invested in the F-35's development by eight U.S. partners: Britain, Italy, the Netherlands, Australia, Turkey, Canada, Norway and Denmark.

(Reporting by Jim Wolf; editing by Andre Grenon)

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