On Thursday, the Department of War announced it had finalized a landmark 10-year framework agreement with Lockheed Martin, under which the United States military will receive 850 F-35 Lightning II stealth aircraft over the next decade. The agreement will create a stable, long-term procurement that will modernize and expand the U.S. military’s fleet of fifth-generation stealth fighters.
“We have fundamentally changed how we stabilize the American defense industrial base to produce at speed and scale,” said Under Secretary of War Michael P. Duffey. “This agreement with Lockheed Martin proves it. By aligning financial incentives with actual performance, we are ensuring our warfighters are equipped with the lethal capabilities they need to fight and win.”
Industrial Base Resilience
The Wall Street Journal first reported the deal, a major operational milestone for the Pentagon’s Acquisition Transformation Strategy, which drives industrial base resilience through long-term procurement visibility and rapid private capital investment. In exchange for the decade-long commitment, which, in addition to the aircraft, includes procurement of initial spare parts and modification kits, plus sustainment of the global F-35 Fleet, the aerospace firm will “self-fund” at least $7 billion in initiatives supporting the F-35 Joint Strike Fighter program.
Along with international customer orders for the F-35 Lightning II, orders across 21-30 will maintain a production rate of approximately 156 aircraft annually.
“This multiyear framework strengthens the way we can plan and invest in the F-35 enterprise,” said Lockheed Martin Chairman, president and CEO Jim Taiclet.
“With the greater certainty that comes from the U.S. government’s transformative approach to F-35 production and sustainment, we can make the upfront investments needed to expand capacity, improve efficiency, and build a more resilient supply chain,” Taiclet added. “That’s good for the taxpayer, good for our suppliers and, most importantly, good for the United States and its allies.”
Lockheed Martin acknowledges that the framework agreement, which remains subject to Congressional authorization and appropriations, addresses both Pentagon and Congressional priorities by improving the F-35 in several ways.
That includes more predictable, multiyear procurement planning that will eliminate the need for supplemental appropriations for obsolescence management and production tooling; and the ability for the aerospace firm to deliver high-volume procurement efficiencies and discounts that translate into tangible taxpayer savings. It will also deliver transparent, data-driven decision-making through integrated analytics that link budget inputs to readiness outcomes, and provide real-time visibility into parts inventory and readiness metrics.
IAM Union International President Brian Bryant applauded the contract, saying that every F-35 starts with a union machinist. “A 10-year contract would give suppliers the confidence to invest, keep specialized skills in the shop and put skilled union workers on firmer ground, giving thousands of working families confidence in their long-term job prospects. It would also save taxpayers an estimated $9 billion to $10 billion and fund the spare parts and repair capacity that keep jets flying.”
Supply Chain Stability, Affordability, and Readiness
The new framework agreement will further ensure supply chain stability by providing more predictable demand through long-term contracts with suppliers. That will enable bulk procurement of raw materials and critical parts for the fifth-generation stealth fighter, while slashing turnaround times and reducing logistics bottlenecks.
According to Lockheed Martin, the result will be improved mission-capable rates and the elimination of the Pentagon’s annual contracting cycle, which has strained the program’s industrial base.
The F-35 program supports 317,000 U.S. jobs, generating approximately $79 billion in annual economic activity over the next decade. The framework will strengthen the base by providing long-term stability and will add investment in industry capacity and logistics by injecting parts into the global spares pool. This multiyear procurement model will enable economies of scale that lower costs while enhancing Lightning II readiness for all F-35 customers.
“Our new multiyear framework gives suppliers stability to plan for the future and invest with confidence, improving readiness across the F-35 fleet,” said OJ Sanchez, president of Lockheed Martin Aeronautics. “This, in addition to the investments Lockheed Martin is making to the global spares pool, will directly translate into higher mission-capable rates and a more resilient supply chain – critical capabilities the warfighter needs to meet today’s mission and prepare for tomorrow’s threats.”
Q3 Financial Results
Lockheed Martin also released its third quarter 2026 financial results. Sales rose 11% to $ 20.7 billion, and net earnings increased 14% to $1.8 billion, or $7.97 per share.
“Our strong third quarter performance underscores Lockheed Martin’s continuing leadership in the development and delivery of advanced and reliable defense technology solutions,” said Taiclet. “Every day, our research, engineering, and production teams are putting highly effective and scalable capabilities in the field. We strive to improve mission performance on a continuous basis by combining proven systems like Aegis, F-35, and Hellfire with the latest digital technologies including AI and Autonomy. We are doing this by integrating our internal innovative solutions with those of start-ups, new entrants into our industry, and commercial technology leaders.”
