Lockheed Is Awarded F-22 Contracts

Lockheed Martin Corp. was awarded $502 million in contracts to build the first two F-22 fighter jets, the Pentagon said. The amount awarded excludes an estimated $191-million down payment on the next six aircraft, which may come as early as this week, officials said. The Air Force plans to purchase 339 of the planes and 777 engines during the next 16 years. At an estimated cost of $187 million each, the F-22 will be the world’s most expensive fighter plane when it goes into service in 2004. The production starts a program valued at $60 billion, the Pentagon’s most expensive weapons system yet. “This contract is very significant because it marks the official transition to production [from development] and gets us into the next phase of the program,” said Lockheed Martin F-22 Program Manager Thomas Burbage. Concerned about costs, Congress in 1997 capped F-22 development at $18.9 billion and production at $40.9 billion. Bethesda, Md.-based Lockheed must pay any overruns under the fixed-price contract, a financial risk it was willing to run to show its commitment to the program, officials said. “Our management believes we can execute within those contracts,” Burbage said. “We don’t consider them ‘high-risk.’ ” United Technologies Inc.’s Pratt & Whitney engine unit was awarded a $39-million contract to begin making the first six F-119 F-22 engines. Lockheed Martin shares fell 31 cents to close at $83.81 on the New York Stock Exchange.