Lockheed Martin and Pentagon unveiled framework to produce 850 stealth fighters

Lockheed Martin $LMT and the Pentagon unveiled a framework agreement on Thursday covering 850 U.S. F-35 Lightning II jets over 10 years, Lockheed Martin said.

The framework also covers initial spares, 10 years of modification kits and sustainment, and international customer orders across Lots 21-30. Production would hold steady at 156 jets annually, the company said.

If the program is granted multiyear authority and related appropriations in the coming months, the F-35 Joint Program Office and Lockheed Martin will work to settle the contract's terms, pricing and schedules in a formal award, the company said. The framework must still win sign-off and money from Congress, according to AFP. The agreement counts as a prearranged long-term contract rather than an order, according to Reuters.

According to Reuters, Lockheed Martin will put up at least $7 billion of its own money toward initiatives backing the F-35 program.

"We have fundamentally changed how we stabilize the American defense industrial base to produce at speed and scale," Under Secretary of Defense Michael Duffey said in a Pentagon statement, according to Reuters.

Lockheed Martin Chairman, President and CEO Jim Taiclet said the framework gives the company greater certainty for investment. "With the greater certainty that comes from the U.S. government's transformative approach to F-35 production and sustainment, we can make the upfront investments needed to expand capacity, improve efficiency, and build a more resilient supply chain," Taiclet said in a statement.

Lockheed Martin said the effort is expected to save taxpayers billions of dollars over the F-35’s lifecycle by locking in prices over the long haul and securing discounts tied to industry-wide volume. The company said the program will sustain 317,000 U.S. jobs and add roughly $79 billion in economic output each year for the next 10 years.

OJ Sanchez, president of Lockheed Martin Aeronautics, said the framework gives suppliers stability to plan and invest. "This, in addition to the investments Lockheed Martin is making to the global spares pool, will directly translate into higher mission capable rates and a more resilient supply chain," Sanchez said in a statement.

More than 1,375 F-35s are fielded around the globe, and the jet operates from 42 bases worldwide, including 13 nations operating on home soil, according to Lockheed Martin.