Pentagon and Lockheed Set 10-Year F-35 Framework for 850 U.S. Jets, Pending Congress

The Pentagon and Lockheed Martin want to lock in a decade of F-35 production. That would give the program's large supplier base long-term orders in place of contracts renewed one year at a time. Under a framework announced Oct. 22 by Lockheed Martin and the Department of War, Lockheed would build 156 F-35s a year across Lots 21 through 30, and the U.S. military would buy at least 850 of them. The deal is not yet binding. It depends on Congress granting multiyear procurement authority and passing fiscal 2027 appropriations, and neither has happened.

According to Lockheed's release, the framework "includes 850 U.S. aircraft over 10 years with associated initial spares, 10 years of modification kits and sustainment, and international customer orders." At 156 aircraft a year for ten lots, total output comes to about 1,560 jets for U.S. and international customers combined. Air & Space Forces Magazine reported that Lockheed also agreed to invest at least $7 billion of its own money in projects supporting the F-35 program.

What the 156-Jet-a-Year Framework Covers

The agreement puts aircraft production, initial spares, modification kits and fleet sustainment under one long-term structure. Lockheed said combining production with spares and modification kits in the same contract would bring volume savings and more predictable costs. The company also said multiyear plans would save billions of dollars "through long-term pricing and industry volume discounts."

The deal covers sustainment of the global fleet as well as new production. Lockheed reports more than 1,375 F-35s fielded worldwide. The agreement also commits the program to combining data from many sources into integrated analytics. Lockheed said this would give more visibility into parts inventory and readiness metrics.

Michael Duffey, undersecretary of defense for acquisition and sustainment, described the deal as a change in how the Pentagon buys major weapons. "We have fundamentally changed how we stabilize the American defense industrial base to produce at speed and scale," Duffey said in the Pentagon's statement. "This agreement with Lockheed Martin proves it."

Lockheed Chairman, President and CEO Jim Taiclet pointed to the certainty the company gets in return for its investment. "This multiyear framework strengthens the way we can plan and invest in the F-35 enterprise," Taiclet said.

Why the F-35 Deal Still Hinges on the FY2027 NDAA and Appropriations

The Pentagon called the agreement "landmark," but its own statement said execution "remains subject to congressional authorization and appropriations." Congress is weighing multiyear procurement authority for the F-35 and the F-15EX as part of the fiscal 2027 defense policy bill. Lawmakers have not passed a fiscal 2027 budget either, so the framework has no funding for now.

Major terms remain open. Air & Space Forces Magazine reported that pricing and schedules "have yet to be hammered out." It is also unclear how many of each F-35 variant would be built, or how the U.S. share would be split among the Air Force, Navy and Marine Corps. Lockheed said that if Congress provides the authority and money in the coming months, the F-35 Joint Program Office and the company will settle contract terms, pricing and schedules through a formal contract award.

Until then, the 850-jet figure is a planning number, not an obligation. Program offices, primes and suppliers should treat it that way in their capacity and financial plans.

How Multiyear Buying Changes Lockheed's Supplier Contracts

For the supply chain, the main change is how long contracts run. Lockheed said predictable demand would allow long-term supplier contracts covering bulk purchases of raw materials and critical parts. The company expects this to shorten turnaround times and improve mission-capable rates. Those purchases are now made each year, a practice Lockheed said "has historically strained the industrial base."

Suppliers make up most of the jet. On Lockheed's third-quarter earnings call Oct. 22, Taiclet said at least 60 percent of an F-35's content comes from suppliers. Major suppliers include Northrop Grumman, which makes the center fuselage, and BAE Systems, which makes the aft fuselage. "We want them to have production stability, just as we would like to have it," Taiclet said.

Taiclet told investors that Lockheed and its suppliers would work under fixed-price contracts with escalation, in which set prices rise under certain economic conditions. He said the structure lets companies keep savings they produce. "We will get to retain those profits under the fixed-price-with-escalator concept," Taiclet said, adding that under the earlier approach Lockheed had to give back improvements it funded internally through price and operating profit.

Taiclet also named late or poor-quality supplier deliveries as one of Lockheed's biggest costs. He said he expects the multiyear structure to help fix those problems. Lockheed claims the program will support 317,000 U.S. jobs and about $79 billion in annual economic activity over the next decade.

Where the Savings Go: Sixth-Generation Upgrades for the F-35

Lockheed has said where some of the money it expects to save would go. On the earnings call, Taiclet said the framework would let the company add sixth-generation technologies to the F-35. He described the goal, as reported by Inside Defense, as trying "to get to 80% of what a sixth-generation clean-sheet aircraft would look like at 50% of that clean-sheet aircraft cost." Lockheed first proposed the idea in April 2025, after Boeing won the Air Force's F-47 contract.

No dollar figure for those savings has been released. Any upgrade path would still go through the normal requirements and budget process.

What It Means for Contractors

F-35 suppliers should plan for a possible shift from one-year buys to multiyear commitments with fixed prices and economic escalation. Firms in the program's lower tiers should review how their own vendor agreements would handle escalation clauses and multiyear material buys, and whether they have the cash and capacity to support bulk procurement if Lockheed asks for it.

The timeline depends on Congress. Contractors should follow the fiscal 2027 NDAA language on F-35 and F-15EX multiyear authority and the defense appropriations bill. Lockheed has said terms, pricing and schedules will not be final until a formal award follows both.

Lockheed's commitment to invest at least $7 billion is also worth watching. The sources reviewed do not say what projects that money covers. If it goes to production tooling, spares pools or supplier capacity, it could create subcontract work outside the regular lot contracts. Firms that support F-35 sustainment, modification kits or data analytics should watch for how the Joint Program Office structures those parts of the eventual award.