Lockheed wins $5.6 billion in defense deals

— Lockheed Martin Corp. on Friday received Defense Department contracts worth as much as $5.6 billion for 31 additional F-35 jets and the last two of six advanced military communications satellites, the Pentagon said.

The contracts will be immune from the automatic budget cuts taking effect in 2013 if Congress and the White House can’t negotiate an agreement to prevent more than $600 billion in tax increases and the spending reductions. Pentagon officials have said most contracts awarded before the start of 2013 wouldn’t be reduced.

Lockheed’s Fort Worthbased Aeronautics unit’s contract for a sixth installment of F-35s can’t exceed $3.67 billion when its final details are hammered out next year.

The Pentagon said it also awarded the company’s Sunnyvale, Calif., Space Systems unit a $1.93 billion contract for the final two Advanced Extremely High Frequency satellites in a constellation of six.

Friday’s “undefinitized contract action” for the F-35 doesn’t trigger a $3.67 billion payment to the nation’s largest defense contractor.

Instead, it sets a threshold target and obligates an unspecified amount to begin assembly of 18 conventional Air Force models, seven Navy variants designed to land on aircraft carriers and six Marine Corps short takeoff and vertical landing versions.

Details such as the contract’s target costs, profit, cost ceiling and overrun share line will be completed next year when a final contract price is settled, much as those were for the recently completed, $3.8 billion fifth production contract for 32 jets.

Business, Pages 26 on 12/29/2012

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