Kongberg Wins F-35 Contracts – Maybe

As Norway was saying that it will sign on to the F-35 Production Phase, Kongsberg Defence & Aerospace was signing “long-term framework agreements” with Lockheed Martin and Northrop Grumman to manufacture composite products for the aircraft. The Kongsberg release maintains that “the agreements were landed based on fully competitive prices,” but adds that “completion of the agreements is conditional on Norway deciding to procure the JSF.”

There seems to be a conflict in those two statements, but we’ll let that pass. The framework agreements have an initial scope of NOK 1.3 billion and NOK 650 million, respectively (currently about $308 million combined). They will extend for more than 8 years, and require the construction of a new composite factory; full-scale production will mean the scope can potentially increase to a total of NOK 6-8 billion (currently around $930-1,240 million). Because of that investment requirement, the framework agreements are “also predicated on the requirement that the Norwegian authorities furnish a guarantee related mainly to the political risk that Norway might opt for an alternative other than the American Joint Strike Fighter. KONGSBERG is in close dialogue with the Norwegian authorities on this issue.” Norway is, after all, keeping its options open…

Nov 20/08: Norway chooses the F-35 over the JAS-39, though the way they chose to make that decision and announce it has created controversies, and had a negative effect on relations with Sweden. There are also signs that competitions in Denmark and Croatia may also be affected. Read “F-35 Lightning II Wins Dogfight in Norway” for more.

July 3/08: Kongsberg Defence & Aerospace signs a final long-term framework agreement with Lockheed Martin to produce composite and titanium parts for the F-35. The parts will be produced at the new 30,000 square meter plant in Kongsberg, Norway, where production is scheduled to start in January 2009 and last until 2015.

The agreement is a result of negotiations conducted against the background of the original production framework agreement signed in January 2007. The finalized agreement makes Kongsberg the exclusive supplier for these components during the F-35′s first phase of serial production, involving parts for 306 aircraft valued at about NOK 1 billion (about $197 million). This part of the agreement is not conditional on Norway’s upcoming fighter choice.

If Norway does choose the F-35 as its F-16 replacement, however, the agreement could have a potential value of about NOK 6 billion (about $1.18 billion). Kongsberg release.