By Richard Burnett
Lockheed Martin Corp. has received a deal worth $253 million to build fighter-jet flight simulators and other training systems for Saudi Arabia’s armed forces, the company said Monday.
Terms of the contract call for the company to develop and produce flight simulators, maintenance trainers and other systems for Saudi Arabia’s F-15SA fighter-jet fleet. Delivery of the systems will take place through 2020.
Lockheed’s Training Solutions operations in Orlando and in Akron, Ohio, will perform the work.
The contract is the latest in a long-running series of deals for Lockheed with the Saudis. The company has built training systems for the U.S. ally since the 1980s.
The deal comes more than a year after the United States signed a $30 billion contract to sell Saudia Arabia 84 new F-15 jets and to modernize 70 existing F-15s. Lockheed’s training systems will be part of the F-15SA modernization work, the company said.
“The complement of F-15SA training systems starts with desktop trainers and progressively increases in capability to full-mission weapons-systems trainers,” Jim Weitzel, vice president for training solutions, said in a prepared statement.
The contract is managed by the U.S. Air Force Life Cycle Management Center as part of a foreign-military sales agreement between the U.S. and Saudi Arabia.
Lockheed and other major defense contractors have focused on foreign military deals in recent years, amid uncertainty about how much U.S. military spending would fall with the end of the war in Iraq and the winding down of the war in Afghanistan. The “sequester” deficit-reduction budget cuts that took effect March 1 have put added pressure on the federal government to approve foreign arms sales for defense contractors.
But global arms deals are not necessarily good for U.S. taxpayers, said Steve Ellis, vice president of Taxpayers for Common Sense, a budget-watchdog group in Washington. He said contractors reap much higher profits from foreign contracts than from U.S. defense contracts, which cap profit margins at about 5 percent.
“Foreign arms sales are a way for contractors to continue to reap … [financial] benefits after they have already had the costs of developing these systems paid for by taxpayers,” Ellis said.
Congress, meanwhile, is scrambling to mitigate the effect of the deficit-reduction cuts on the Defense Department by restoring funds to certain military programs, he said.
“The fact of the matter is that our defense spending is ramping down because the war in Iraq is over and we’re trying to get out of this war in Afghanistan,” he said. “That changes the whole dynamic and economic model, and the defense industry is going to have to come to grips with that, regardless of the sequester.”