DoD Poised To Approve Buy of 17 More F-35s; STOVL In Limbo Awaiting Engine Test

Defense Daily, Nov 25, 2008

By Marina Malenic

The Pentagon is preparing to approve the purchase of 17 more Lockheed Martin [LMT] F-35 Joint Strike Fighters, a senior official said last week.

Defense Department acquisition executive John Young said he is reviewing the multibillion-dollar contract to build planes for the Air Force, but purchase of the variant being developed for the Marine Corps could be delayed pending further tests of the Pratt & Whitney [UTX] engine.

Young's team met to discuss the issue during a Defense Acquisition Board (DAB) meeting earlier this month.

"I certainly didn't see anything in the DAB that we shouldn't approve it," he said during a Nov. 20 breakfast with reporters. "I'm anxious for the program office and Lockheed to agree on the negotiated prices. But right now the good news is, they seem to be on or below the pricing curve."

An industry official told Defense Daily that the "figure is likely to be in the $3 billion range" for the 17 aircraft.

However, Young said the short take-off/vertical landing (STOVL) variant could face some delays pending testing.

"I can see approving at least the" conventional take-off and landing (CTOL) variant purchase, he said. "The STOVLs...may have to wait to be approved contingent on getting...the engine cleared for STOVL operations."

The STOVL, or F-35B, prototype plane has been grounded since August while Pratt & Whitney corrects a design flaw that caused two separate ground test failures.

Meanwhile, Norway last week announced its intention to replace its F-16 fleet with F-35s.

Oslo conducted a competition between the F-35 and the Swedish- manufactured Saab Gripen NG. Denmark is also conducting a competition between the two for its next generation fighter and is expected to announce a decision next year.

While the United States is the primary customer and financier of the F-35 effort, the United Kingdom, Italy, the Netherlands, Canada, Turkey, Australia, Norway and Denmark have contributed $4.4 billion toward development costs. Those costs are estimated at more than $40 billion. The purchase of an estimated 2,400 aircraft for all the participants has been pegged at another $200 billion.

Earlier in the day, Israeli Prime Minister Ehud Olmert met with President George W. Bush and congressional leaders. Reports indicate that he discussed his country's participation in the program.

Israel has asked to buy up to 75 jets, but Congress has yet to approve the deal.

The Israeli government is seeking to spend upward of $15.2 billion for 25 F-35s, with an option to purchase 50 more, according to the Defense Security Cooperation Agency (DSCA). The initial request is for 25 CTOL aircraft; the option could be for 50 of the CTOL or STOVL variant, according to DSCA.

Lockheed Martin, meanwhile, announced last week that General Dynamics [GD] will manufacture the F-35 gun system. General Dynamics Armament and Technical Products received two contracts for the production of GAU-22/A gun systems worth nearly $9 million, according Lockheed Martin.

[Copyright 2006 Access Intelligence, LLC. All rights reserved.]

TICKER(S): Lockheed Martin [LMT]: Pratt & Whitney [UTX]: General Dynamics [GD]: