Pratt & Whitney, Pentagon finalize $1.1 bln F-35 engine deal

Reuters

WASHINGTON, Oct 23 (Reuters) - The Pentagon on Wednesdayannounced it had finalized a $1.1 billion contract with Pratt &Whitney, a unit of United Technologies Corp, to build 38engines for a sixth batch of F-35 fighter jets built by LockheedMartin Corp.

The Pentagon's F-35 program office and Pratt said the twosides signed a $508 million contract modification on Wednesday.Added to previously awarded preliminary contracts, that broughtthe total value of the contract to $1.1 billion.

The contract covers 38 F135 engines, as well as programmanagement, engineering support, sustainment and spare parts.

"This agreement represents a significant milestone for theF-35 program, and reflects the execution of cost reductioninitiatives shared by the government and Pratt & Whitney," theprogram office and Pratt said in a joint statement.

The two sides reached agreement on the contract terms inlate August and have been ironing out the details since then.

The contract reflects a 2.5 percent reduction in the priceof the common configuration engine used in both the Navy and AirForce models of the F-35, and a 9.6 percent cut in the price ofthe engine that powers the B-model, which takes off from shorterrunways and lands like a helicopter, according to the statement.

The release did not give details on the cost of each engine.

"The engine price has been going down and that trend willcontinue," Air Force Lieutenant General Chris Bogdan, who headsthe F-35 program, said in the joint statement.

He said Pratt's senior leaders were working closely with thecompany's suppliers to continue driving down the cost.

Chris Flynn, vice president of F135 and F119 engines forPratt, said the key to generating further savings would beincreasing volume and production rates. "We remain focused onreducing costs, meeting our delivery schedule commitments, andincreasing the tempo of contracting," he said in the statement.

Pratt has delivered 115 production engines to the program todate. Deliveries of the new engines will begin in the fourthquarter of this year.

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