The agreement covers production Lot 12, with options for Lots 13 and 14. The first lot will include 157 aircraft, according to a Pentagon statement. The "framework" of the deal would lower the cost of an F-35A to $80 million in Lot 13, a year earlier than initially planned. Under Lot 11, the aircraft cost $89.2 million each.
"This is a historic milestone for the F-35 enterprise, and marks the largest procurement in the history of the department," Undersecretary of Defense for Acquisition Ellen Lord said in a statement.
"I am proud to state that this agreement has achieved an estimated 8.8 percent savings from Lot 11 to Lot 12 F-35As," Lord said, as well as an average reduction of 15 percent "across all variants from Lot 11 to Lot 14." The deal "symbolizes my commitment to aggressively reduce F-35 cost, incentivize industry to meet required performance, and to deliver the greatest capabilities to our warfighters at the best value to our taxpayers," she added.
By law, the US cannot enter a multi-year purchase agreement until after a program has entered full-rate production. The US could not participate in the first year of the "block buy," but international partners can, and have already signed up to do so. Block buys or multi-year buys commit the government to buying a designated number of aircraft. Armed with this commitment, the contractor can make more economical buys of materials and components, and more efficiently hire and deploy its workforce.