Lockheed Martin: The Supplier Costs Behind the F-35 Price

In the Lockheed Martin F-35 pricing settlement, the company agreed to pay $29.74 million to resolve False Claims Act allegations that it withheld supplier cost and pricing data and inflated negotiated aircraft contract prices. The new payment was in addition to $11.3 million Lockheed had previously paid the Defense Department for the same undisclosed data on some of the same contracts.

The Justice Department announced the settlement on February 6, 2025. The alleged gap was between information Lockheed already knew and information the government received. For someone working with supplier costs, estimates or proposal revisions, that gap can be visible long before it becomes a government overpayment.

What Lockheed Allegedly Withheld During F-35 Negotiations

The government alleged that Lockheed withheld known supplier cost or pricing data during negotiations for five F-35 production or sustainment contracts between 2013 and 2015. Its customer was the Defense Department’s F-35 Joint Program Office. According to the government’s account, the office would have awarded the contracts for less if Lockheed had supplied accurate, complete and current data.

The sustainment work reaches maintenance, parts and support after an aircraft is built. That is why a supplier-cost discrepancy can matter to someone pricing the aircraft’s continuing support as well as someone working on the cost of manufacturing it.

Why Supplier Cost Data Matters in a Sole-Source Price

In a sole-source negotiation, the government has no competing offer to test against the contractor’s proposed price. The Justice Department explained that the Truth in Negotiations Act gives government negotiators access to the cost or pricing data the contractor used to develop that proposal.

We call that bargaining blind when the seller withholds the required facts. The taxpayer is already buying without price competition, and the buyer then has to bargain without information the contractor knows. Some level playing field.

The Certificate of Current Cost or Pricing Data covers the facts behind an estimate as of the agreed date. That includes information reasonably available elsewhere in the company, even if the negotiator did not personally know it. For an estimating or supplier-management employee, the relevant facts may sit upstream of the person who presented the proposal.

The contract’s pricing terms explain how those facts affect government money. Even with a firm-fixed price, the cost information used to negotiate that price matters. The question is what the contractor told the buyer when they agreed on the price, rather than which expenses it later submitted for reimbursement. We connect the disputed data to the particular proposal, agreement and contract terms it affected.

Lockheed’s position as the prime contractor puts supplier information behind the government-facing contract. In its July 2025 report on foreign-supplier dependence, the Government Accountability Office explained that the federal procurement database did not contain the subcontracts through which Lockheed bought F-35 subsystems, components and raw materials. A government contract entry could identify the prime without showing those underlying purchases.

The Whistleblower Case and the Settlement

A whistleblower filed the underlying False Claims Act qui tam case in the Eastern District of Texas. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For a defense contractor whistleblower claim, we work with the person who understands the information inside the business and connect that account to the government’s money.

The Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Texas coordinated the settlement. The F-35 Joint Program Office, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service and the Defense Contract Audit Agency assisted.

That combination brought the government buyer, investigators and contract auditors into the same case. The different investigative and audit roles follow different parts of the transaction, from the data behind a proposal to the price it helped secure.

What Evidence Is Needed to Prove Fraud?

For alleged withholding of supplier pricing data, the evidence connects what the contractor knew, what it disclosed and the negotiated price affected. The records behind that comparison include the proposal and negotiation file, the cost or pricing data and the executed contract or modification. We examine them together because each answers a different part of the allegation.

A supplier quote or cost input can show the information available to the business. Its date and internal recipients can explain when the company knew it. The proposal versions, pricing certification and negotiation record then show how the company presented its costs to the buyer. The contract connects that presentation to the agreed price.

A pricing employee may understand why an estimate changed, while a purchasing employee may know the supplier information behind that change. An auditor may recognize the difference between the internal support and the submitted proposal. We work with that knowledge to identify the particular representation that affected government money, without expecting one person to know every part of the transaction.

The Earlier Lockheed LANTIRN Pricing Case

Lockheed’s earlier LANTIRN case also concerned the information behind a negotiated price. In its August 27, 2003 announcement, the Justice Department reported a $37.9 million civil settlement involving Air Force navigation and targeting pod contracts. A former employee alleged deficient cost or pricing data on four contracts and mischarging on another.

The government joined the claim concerning a foreign military sales procurement for resale to Saudi Arabia, Greece and Bahrain. Program management allegedly inflated the proposal to generate profit that would cover overruns on another Air Force contract. That allegation gives the pricing decision an internal business purpose: making one proposal carry the cost of trouble elsewhere.

You Know What Went Into the Price

If you saw supplier costs disappear between the internal estimate and the proposal sent to the government, speak with our whistleblower experts. We build the case with you around the pricing decisions you understand and bring in defense contractor whistleblower lawyers who know negotiated procurement. We stay beside you the whole way to build your strongest defense contractor whistleblower case.