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Negotiations continue between Lockheed and the Pentagon

Negotiations between the Pentagon and Lockheed Martin started last year to iron out all the details for the purchase of 32 F-35 fighters. The reason negotiations on pricing have dragged on for so long is due to the Pentagon's use of new pricing data according to Defense News. DOD officials are now using what's being called a "should-cost" estimate for the purchase of the F-35 fighters based on data from the previous four F-35 purchases.
 
Undersecretary of Defense for Acquisition Technology and Logistics, Frank Kendall, says that the Pentagon's move to "should-cost" estimates were used to develop a "bottoms-up cost estimate based on that previous history."
 
“We started negotiations on the government side with a very well-documented set of costs, called the should-cost, and then we were able to compare that to the bid that we received, item-by-item, line-by-line,” Kendall said during a July 16 meeting with a small group of reporters in his Pentagon office. “Going through and trying to resolve the differences has been the process that has taken so long.”
 
Kendall also notes that once negotiations conclude, "We’ll be in a very good place to go ahead and negotiate for future lots."
 

A group of Lockheed F-35B Lightning II fighters [Source: Lockheed Martin]
 
The Pentagon has been working hard to put pricing pressure on Lockheed Martin for F-35 purchases despite reducing the number of aircraft required over the next five years by 179 units. Typically, every time purchase plans are reduced by any partner nation, pricing for the F-35 increases.
 
Kendall also believes that sequestration, or mandatory spending cuts that will go into effect in January, will not affect every F-35 acquisition contract. Sequestration only applies to funding that is not yet obligated according to Kendall.

The Pentagon is fighting for every penny it can save on the F-35 fighters as the overall lifetime cost of the F-35 program continues to soar.

Source: Defense News



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This article is over a month old, voting and posting comments is disabled

By TSS on 7/18/2012 3:21:16 PM , Rating: 3
quote:
This is a perfect example of the horrible nature of government business practices.


*Modern day* government business practices. It needs mentioning because as the poster above you noted, the previous generations of aircraft worked out fine and the government certainly wasn't less involved. It's this generation that's extremely bloated. I wonder why that is.

News from holland by the way, our labor party switched sides and is now against the purchase of the JSF, giving a chamber majority against the purchase instead of for. The current demissionary cabinet (the cabinet fell in may, new elections in september) still refuses to pull the plug, saying a demissionary cabinet does not have the authority to make such big decisions (which is BS, as long as there's a chamber majority it doesn't matter what the cabinet wants). It's nigh unconstitutional and i have to admire their balls.

But unless we get another 100% rightwing cabinet after september (because it's pretty obvious now they support the jobs for dutch companies the partner program brings no matter the cost to the tax payer), which has a low chance of happening, expect the plug to be pulled entirely.


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