BAE, Boeing to Challenge Lockheed on F-16 Work

F-16 upgrades

Lockheed Martin Corp., the world’s largest defense contractor, is expected to square off against BAE Systems Plc and Boeing Co. on competitions to upgrade foreign fleets of F-16 fighter jets.

Lockheed, the Bethesda, Md.-based contractor that makes the aircraft, had a lock on the work until last year, when London-based BAE successfully challenged it on a deal to refurbish more than 130 of South Korea’s jets. Chicago-based Boeing has also expressed an interest in the business.

Contractors are increasingly looking at opportunities to upgrade F-16s as defense budgets decline in the U.S. and Europe, threatening funding for the production of new aircraft.

“Most of our F-16 customers recognize and enjoy the benefit of the economies of scale that the F-16 program brings, as well as the interoperability benefits between the air forces around the world,” Mark Johnson, a Lockheed spokesman, said in an e-mail.

Like other popular U.S. military aircraft, the F-16 won’t be on display at the upcoming Paris Air Show due budget cutbacks in Washington, D.C.

More than 4,500 of the fourth-generation fighter aircraft, known in the U.S. as the Fighting Falcon, have been built since production began in the mid-1970s. General Dynamics Corp. initially manufactured the planes before selling its aircraft unit to Lockheed in the 1990s.

About half of those jets were purchased by the U.S. military. The rest were bought by more than two dozen countries, including Israel, Turkey, Taiwan, Iraq and Pakistan.

Lockheed has already upgraded more than 1,000 of the aircraft. A couple months after it lost the South Korea decision, the company was awarded a $1.85 billion contract from the U.S. Air Force to upgrade more than 140 of Taiwan’s F-16s with new radar, global positioning and electronic warfare systems.

In the U.S., Lockheed is the main contractor on a $2.8 billion Air Force program to upgrade about 350 of the single-engine fighters’ airframes and avionics systems. The multi-year effort slated for certain Block 40 and Block 50 versions is designed to keep the aircraft viable after 2025 in part because of delays to the F-35 Joint Strike Fighter, the Pentagon’s most expensive weapons acquisition program.

The Air Force effort is the basis for all F-16 upgrades within the Defense Department’s so-called Foreign Military Sales program, Johnson said.

In a foreign military sale, the U.S. buys weapons or equipment on behalf of a foreign government. Countries approved to participate in the program may obtain military hardware or services by using their own funding or money provided through U.S.-sponsored assistance programs, according to the Pentagon’s Defense Security Cooperation Agency, which announces the deals.

“Many countries will follow the USAF lead for the upgrade of the F-16 aircraft,” Johnson said. “Doing so yields significant benefits for the country as well as the USAF as they partner in the development of the upgrade program.”

The avionics enhancements include an active electronically scanned array radar, which boosts the plane’s ability to destroy enemy air defenses; a higher-resolution display unit; single-point access for electronic warfare control; and an integrated broadcast system for intelligence feeds, according to Pentagon budget documents.

Lockheed’s aeronautics unit, which accounted for about a third of the company’s overall 2012 revenue of $47.2 billion, is conducting a competition between Waltham, Mass.-based Raytheon Co. and Falls Church, Va.-based Northrop Grumman Corp. to supply the new radar, Johnson said.

Boeing has contracts with the U.S. military to modify retired F-16 aircraft into unmanned aerial targets for training exercises. BAE also performs some of the work, which involves the installation of electronic control equipment. Spokesmen for the two companies didn’t respond to requests seeking comment.

About the Author

Brendan McGarry
Brendan McGarry is the managing editor of He can be reached at Follow him on Twitter at @Brendan_McGarry.
  • Anonymous

    “the company was awarded a $1.85 billion contract from the U.S. Air Force to upgrade more than 140 of Taiwan’s F-16s”

    LOL. My tax money to spend on Taiwan’s jets. Man, sure would be nice if that money was spent on America instead.

    • Big-Dean

      no worries anonymous, that $1.85 billion will only buy us a couple of F-35s so we might as well give it away to our allies

    • Patrick

      “In a foreign military sale, the U.S. buys weapons or equipment on behalf of a foreign government.”

      It helps if you keep reading before forming asinine opinions.

    • Blue

      Taiwan is paying for the upgrade. The quote is misleading – it’s still Taiwan that is paying the bill for that one.

      • Through FMS, which is still tax dollars. FMS is tax dollars – not repayable by the foreign government, but given by our government for their cooperation by giving them money to purchase, upgrade, or maintain weapons.

        • Guest

          Accorfing to the DSCA website FMS Sales can be ” conducted using host nation funds, donor funds or FMF”. Meaning our tax dollars or their funds.

        • Blue

          No, Taiwan does not receive FMS from the United States. The weapons that Taiwan purchases from the United States, Taiwan foots the bill for – not the American taxpayer.

          It’s not like how the US treats Israel.

    • person with a brain

      There is this thing called Geopolitics. The US is not in a bubble all by itself. We have interests all over the world and buying more crap for ourselves is not always the best way to achieve our goals.


    Lockheed Martin, the worlds largest defense contractor. Fighting to upgrade an aircraft they make. lol.

    • blight_

      Bear in mind that airlines don’t always use Boeing or Airbus to do all their maintenance. They use third party contractors to do it to cut the cost, and the econoairlines sometimes encounter a spectacular failure when taken too far.

      For example, ValuJet had a series of interesting failures that traced back to badly trained personnel and cheap contractors. So ValuJet is now AirTran.

  • hibeam

    Competition leads to higher performance at lower cost. This is why the teachers unions and government employees in general are so vehemently opposed to the concept.

  • Blue

    Pardon my ignorance, but if the F-16 is a Lockheed Martin product, then how could Boeing possibly do a better job of upgrading a Lockheed product than Lockheed itself could?

    Wouldn’t Lockheed be the one that is ultimately the most familiar with its own product?

    • tmb2

      Fair question. I’m guessing, but the upgrades probably involve parts common enough now that the other companies have access to the subcontractors who actually make them.

    • blight_

      Boeing’s product is the JHMCS, and the F-16 -> QF-16 drone conversions. From an older page (

      “Competition in the F-16 upgrade market is heating up, with Boeing joining BAE Systems in challenging Lockheed Martin’s dominance as OEM. Boeing is touting the experience it gained recently in converting F-16s to unmanned drones for the U.S. Air Force. BAE Systems continues to emphasize its 270-aircraft upgrade for the U.S. National Guard, as a basis for securing international work.”

      And this was in 2012…

    • The upgrades are internal and therefore not necessary for the original manufacturer to take the lead. To change the mother board in a computer you don’t need to necessarily change the exterior of the box.

  • U.S.A

    im really glad to see compition in our contractors. this leads to more hard work between the companies and better success for the military.


      Written in 1967.

    • blight_

      And if you lose, call your guys on Capitol Hill and drag out procurement a little longer…