Summary
- Lockheed Martin booked almost $64B in contracts in August driven by the F-16 ceiling contract.
- In August, Lockheed Martin received contracts showing importance of data linking and connectivity but also contracts emphasizing the role of the older F-16 despite the availability of the state-of-the-art F-35.
- The Defense contractor showed that it continued to win orders to support its backlog across the portfolio while positioning itself for a more connected future.
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In June 2020, we launched the Defense Contracts Monitor on The Aerospace Forum. The Defense Contracts Monitor is an interactive dashboard that we populate weekly with new contracts awarded to Boeing (BA) and Lockheed Martin (LMT). Currently, the monitor consists of more than 1,000 contracts and we expand that as we are adding more companies to our coverage and update the monitor weekly.
Source: Times of Israel
In this report, I want to have a look at the order inflow for Lockheed Martin during the month of August. You can read the July report here. For this analysis, we used the Defense Contracts Monitor which we have made available to subscribers of The Aerospace Forum.
F-16 Lifts contract awards
Figure 1: Lockheed Martin contracts in August (Source: AeroAnalysis)
In August, Lockheed Martin was awarded 16 contracts valued at $63.9B with funds obligated on time of award standing at $4.6B or 7%.
By far, the biggest contract was for the F-16. Lockheed Martin was awarded a $62B indefinite-delivery/indefinite-quantity contract for the F-16. The $62B contract puts a ceiling for the procurement of F-16 aircraft, services and ammunition orders. The initial delivery order is for 90 F-16 Viper (Block 70/72) fighter jets, 66 of which are likely destined for Taiwan and the other 24 for Morocco. The contract award was discussed in more detail in a previous report emphasizing the strategic importance of the contract award for the US foreign policy as well as the F-16 backlog.
Source: The Times of Israel
Lockheed Martin also received a $911.7 million modification to an existing contract for Terminal High Altitude Area Defense or THAAD. The contract provides for additional development of THAAD, to support test programs and warfighter requirements. Lockheed Martin describes THAAD as Integrated Air and Missile Defense with proven Hit-to-Kill technology. The system is designed to defend against short and medium-range ballistic missiles by using the kinetic energy of an interceptor to eliminate the incoming ballistic missile by impact in the re-entry trajectory of the missile flight. The Defense Contracts Monitor shows that since 2018, Lockheed Martin has received $8.7B in contracts for the THAAD system making it one of the key missile defense programs that Lockheed Martin offers next to the Patriot and Aegis Ballistic Missile Defense. Since 2018, the Missile Defense Agency and Saudi Arabia have accounted for nearly 90% of the contract value.
