Pentagon Commits Nearly $1 Billion to Retrofit F-35 Electronic Warfare System Across Three Service Branches

NAVAIR awards Lockheed Martin $991M to install upgraded EW hardware kits on 432 F-35s — one of the largest single modernization awards in program history.

The Pentagon awarded Lockheed Martin a $991 million contract on May 15 to retrofit the F-35 electronic warfare system on 432 fighters across all three U.S. service branches and allied partner nations.

The firm-fixed-price order, valued at $991,127,074, was awarded on a sole-source basis by Naval Air Systems Command (NAVAIR) to Lockheed Martin Aeronautics Co. in Fort Worth, Texas. All manufacturing will take place at that facility, with the complete retrofit rollout scheduled for completion by March 2032.

One of the largest single modernization awards in the history of the F-35 program, the contract arrives after years of documented failures by the aircraft’s Technology Refresh 3 — known as TR-3 — software package to deliver the advanced electronic warfare capabilities originally promised for the aircraft.

The Department of War described the scope of the contract in its official announcement:

“This order provides for the production and delivery of 432 material modification kits (97 for the Air Force, 54 for the Marines, 42 for the Navy, 106 for Foreign Military Sales (FMS) customers, and 133 for non-U.S. Department of War (DOW) participants) in support of F-35 Joint Strike Fighter aircraft modifications and retrofit efforts associated with modernization of the electronic warfare system and related capability upgrades.”

What the Kits Deliver

The modification kits will provide the avionics hardware, wiring, and components needed to integrate the F-35’s Block 4 upgrade package into the existing fleet. Lockheed Martin has described Block 4 as the program’s most consequential modernization push — “the most significant evolution of F-35 capabilities to date, including increased missile capacity, advanced electronic warfare capabilities, improved target recognition and other, classified capabilities” — spanning more than 70 major upgrades across all three F-35 variants.

The F-35 relies on the AN/ASQ-239 electronic warfare suite developed by BAE Systems. According to BAE Systems, the system “provides F-35s with fully integrated offensive and defensive EW capabilities, including long-range threat warning, self-protection, and targeting support.” Unlike the primarily defensive suites found in legacy fighter aircraft, the AN/ASQ-239 is designed to deliver electronic attack options integrated through the avionics as a unified system of systems, disrupting adversary sensors to make the jet more effective at penetrating advanced air defenses. BAE Systems received a $491 million contract in April 2023 to produce the upgraded Block 4 version of the AN/ASQ-239.

Current F-35 iterations lack the processing bandwidth and cooling capacity to simultaneously run next-generation electronic attack and software-defined jamming protocols against modern multispectral radars fielded by near-peer adversaries. The retrofit kits are designed to supply the computational bandwidth to run advanced EW threat-recognition algorithms that software updates alone have failed to deliver.

A Software Problem That Required a Hardware Solution

The contract is a direct response to the sustained, documented failure of the TR-3 package to unlock the electronic warfare capabilities for which the F-35 was designed.

The Pentagon’s Director of Operational Test and Evaluation stated in the FY2025 annual report, published in March 2026: “No combat-capable TR-3 aircraft have been delivered to the U.S. Services to date. As of the end of September 2025, 158 F-35s had been delivered in the TR-3 configuration.”

The same report found the TR-3 software build had delivered zero new combat capabilities during 2025, leaving Air Force pilots flying aircraft suitable for training but unable to execute key combat functions. Block 4 features under the TR-3 umbrella remain disabled or severely limited. The DOT&E report does not expect full Block 4 capability to be available until 2031.

TR-3 problems halted F-35 deliveries from July 2023 to July 2024, during which up to 110 aircraft were placed in storage. The Pentagon withheld $5 million per aircraft beginning in 2024 over the delays, reducing that figure by approximately $1.2 million per jet in January 2025 as Lockheed showed progress on TR-3 integration. Lockheed ultimately delivered a record 191 F-35s in calendar year 2025 to clear the backlog — but none of those aircraft was combat-capable under TR-3.

A Costly Fix for the World’s Most Expensive Defense Program

The EW retrofit contract adds a fresh layer of cost to a program already under extraordinary financial scrutiny.

Initial procurement costs for the planned global fleet of roughly 2,500 aircraft are estimated at roughly $442 billion, while lifetime sustainment through 2088 is projected at $1.58 trillion — a figure the Government Accountability Office says rose 44% between 2018 and 2023 alone. Total program costs now exceed $2.1 trillion. The Pratt & Whitney F135 engine core upgrade, which is also driving delays in the Block 4 package, is pushing fly-away costs above $100 million per jet; full engine functionality is not expected until 2031.

Critics have long argued the F-35’s concurrency procurement model — which overlaps design and manufacturing phases to compress schedules — backfired, locking the Pentagon into a cycle of building aircraft with hardware deficiencies and then paying to correct them after delivery.

The financial fallout has reshaped near-term procurement plans. A senior Pentagon official confirmed that “F-35 procurement is reduced from 74 to 47 aircraft” in the FY2026 budget proposal, including a roughly 45% cut to Air Force F-35A purchases — from 44 aircraft in FY2025 to 24 in FY2026. The Air Force is simultaneously increasing funding for the sixth-generation Next Generation Air Dominance program and the new F-47 fighter, with the FY2026 budget allocating $3.5 billion for F-47 development. The House Appropriations Subcommittee on Defense has advanced its own bill providing $4.5 billion for 42 F-35As plus additional Marine Corps and Navy variants, pushing back against the proposed cuts.

The Fallout Spreads to Allied Nations

The TR-3 delays have had direct operational consequences far beyond U.S. borders. The F-35 production line has delivered more than 1,300 aircraft to three U.S. service branches and 19 partner nations, and the capability shortfalls have cascaded globally.

Denmark and Belgium both committed to donating F-16s to Ukraine, but because their F-35s arrived late or in training-only configurations, both nations were forced to extend the service life of their F-16 fleets and slow deliveries to Ukrainian forces. Denmark recalled six TR-2 aircraft from Luke Air Force Base back to its home soil to maintain basic pilot training while waiting for combat-ready TR-3 jets still stuck in testing, according to Air and Space Forces Magazine.

The Israeli Air Force has partially worked around some software bottlenecks by substituting older available munitions, such as JDAMs for newer weapons with limitations under TR-3. The advanced EW capabilities promised under TR-3 Block 4 remain unavailable to Israeli operators as well.

Several allied nations are reconsidering their F-35 commitments. Canada’s Defence Minister Bill Blair said in March 2025 that his country was “…examining other alternatives — whether we need all of those fighter jets to be F-35.” Switzerland faces potential cost increases of 650 million to 1.3 billion Swiss francs beyond the originally contracted 6 billion Swiss franc figure. The United Kingdom has announced plans to amend its F-35 order. Proposed sales to Spain and Portugal have fallen through.

International partners will receive 239 of the 432 kits under this contract. Lockheed Martin has stated that “Block 4 capability upgrades benefit all nations operating the F-35,” with a standardized EW baseline considered a prerequisite for full joint interoperability across the global fleet.

The contract draws on procurement funds from FY2024, FY2025, and FY2026 across Air Force and Navy accounts, along with Foreign Military Sales and partner nation contributions. Naval Air Systems Command, headquartered at Naval Air Station Patuxent River, Maryland, is the contracting activity.