Lockheed Martin Corporation (NYSE:LMT) is enter into the final phase of $2.2 billion deal with the U.S. Air Force, in which both the side are closing the terms of the deal. The deal also said, in coming weeks US government will purchase two sophisticated military communications satellites for spacecraft from the company.
A top US Air Force general has revealed that in last December they have granted the firm an initial agreement of value $1.9 billion for purchasing of Advanced Extremely High Frequency fifth and sixth satellites, through this deal the firm will work on the latest spacecraft, along with Air Force officials.
Lieutenant General of Air Force Space Command, Ellen Pawlikowski, has said in the latest contract with the company, they will settle the conditions of that contract, which is $1 billion lower than previously estimated made by government.
Mr. Pawlikowski as well as other Air Force officials has pushed forcefully to decrease the price of building satellite for government, especially the rockets used to launch them into space. Because space programs have previously considered being the costliest parts of the US government’s procurement budget, costing huge amount to the authorities.
In mid-September, both the side made a handshake agreement on the conditions of the deal, said Pawlikowski. But the deal which is expected to close by the end of this month has hindered by the shutdown and the efforts to end the deal became slow.
The company vice president of Protected Communication Systems, Mark Calassa, said the new deal would decrease costs by approximately 35% in contrast to the previous estimate made for the satellite deal. He also added the decrease came after by locking in savings with a twin purchase, transitioning to fixed price and by gathering same teams across the US military space line of business.
The Pentagon previously estimated that it will purchase two satellites for $3.7 billion, while the estimated price had previously decreased to approximately $3.1 billion after the Air Force determined to purchase two satellites simultaneously. Pawlikowski also revealed that close relations of Air Force with company has decreased the price of advanced communications satellites, and Air Force also expect that for the next deal of two missile with the company, it is expected the cost may trim to approximately $450 million. Lockheed Martin Corporation (NYSE:LMT) shares decreased -0.35% to $122.03 in last trading session.