Lockheed Martin Corp and the U.S. Defense Department have reached an agreement in principle on a fifth batch of 32 additional F-35 fighter planes, the Pentagon said on Friday, bringing nearly a year of negotiations to a close.
The deal is valued at around $3.8 billion, although the two sides are still finalizing details, a source familiar with the agreement told Reuters.
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Each of the new planes would cost less than 50 percent of the price the U.S. government paid for planes in the first batch, said the source, who was not authorized to speak publicly.
The agreement will also help free up preliminary funding for a sixth batch of planes which Lockheed, the Pentagon's largest supplier, has been building at its own cost for some time.
Pentagon spokesman George Little said details on the cost per aircraft would be released once the final contract is signed.
The agreement removes a cloud that had been hanging over the $396 billion F-35 program, the Pentagon's costliest procurement program. Both sides have been trying to reach an agreement on this batch of planes since last December.
The Pentagon's chief weapons buyer, Frank Kendall, told Reuters on Wednesday that the two sides were "getting close" to an agreement after what he described as a "very productive" meeting with Lockheed President Marillyn Hewson.
Hewson said Lockheed and the Pentagon were also making progress in talks about additional funding for early work on the sixth batch of F-35 jets.