The Pentagon is withholding $5 million from Lockheed Martin for each new F-35 fighter jet that isn’t loaded with the full upgrade of the latest version of the jet. The company resumed deliveries of the Technology Refresh-3 variant of the F-35 in July after problems with the new software package. Approximately $5 million per aircraft is being withheld until combat capability is delivered. Lockheed plans to deliver 75 and 110 aircraft in the second half of this year primarily in the TR-3 configuration.
Air Force Secretary Frank Kendall mentioned that Lockheed is trying to get TR-3 done and that financial incentives are being used to strengthen the effort. The F-35 Joint Program Office and Lockheed Martin have reached an agreement for the acceptance and delivery of Technology Refresh 3-enabled aircraft with robust combat training capability. Pentagon officials do not know when the combat-ready TR-3 package will be completed. Lockheed officials estimate next spring, acknowledging schedule risks.
To clear the backlog of newly-built and stored F-35s at Lockheed’s facilities, the company plans to deliver 20 aircraft a month. The new TR-3 hardware and software are crucial for the F-35 program to outpace China. Delays and cost overruns have led to the reimagining of Block 4’s capabilities and redefine the must-have capabilities that can be delivered by the industry.
