Lockheed Martin and the US Air Force have reached agreement on converting the C-130J multi-year procurement from a commercial to a military contract.
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| Lockheed can bank on at least 39 more C130Js |
The USAF says the converted contract “draws a clear line of separation” between the 23 aircraft purchased in fiscal years 2003 to 2005 under commercial terms and the remaining 39 aircraft to be procured in FY06-08 under military contracting rules. The contract has yet to be finalised, but is expected to be signed before the 2006 fiscal year ends on 30 September and before the first FY06 aircraft is delivered in December.
Saying it is “premature” to estimate the renegotiated contract cost, the USAF says the unit price of the C-130J “will not be more than the current price of $66.5 million”. Issues remaining to be negotiated are the final profit, recognition of development costs incurred by Lockheed and any potential shut-down costs, it says. The not-to-exceed price set for the remaining 39 aircraft is the same as under the current commercial contract – $2.4 billion.
Lockheed developed the C-130J as a commercial venture after the USAF refused to fund the development of its improved Hercules. Congress supported the programme by adding money each year to buy aircraft until the six-year deal for 67 USAF and US Marine Corps C-130Js was signed.
Source: Flight International
