RTX Secures $241 Million Pentagon Contract for F-35 Engine Upgrades

RTX Corp. (NYSE:RTX) has secured a contract modification worth $240,754,035 from the U.S. Department of Defense to advance the development and readiness of the F135 engine, which powers the F-35 fighter jet fleet. The Pentagon announced the award, which expands an existing agreement for the critical propulsion system.

Scope of the Agreement

The award is structured as a cost-plus-incentive-fee and cost-plus-fixed-fee modification. It provides funding for non-recurring engineering work on the F135 engine aimed at resolving operational issues and enhancing overall fleet readiness for the U.S. Air Force, Marine Corps, Navy, and allied partners.

A key component of the contract involves supporting the transition of the engine's core upgrade from its risk-reduction design review phase into full-scale engineering and manufacturing development (EMD). The agreement also covers the procurement of long-lead hardware for a spare test engine, according to the Defense Department's announcement.

Funding and Timeline

The work will be performed across several U.S. locations, with the majority concentrated in East Hartford, Connecticut (53%), and Indianapolis, Indiana (15%). The project is slated for completion by March 2028.

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The contract was awarded by the Naval Air Systems Command and was not competitively procured. At the time of the award, the Defense Department will obligate funds from multiple sources:

• $87.6 million from fiscal 2025 Air Force research and development funds.
• $87.6 million from fiscal 2025 Navy research and development funds.
• $39.0 million from F-35 cooperative program partner funds.

Context for Investors

This contract modification reinforces RTX's entrenched position as the sole engine provider for the Lockheed Martin F-35 Lightning II, one of the Pentagon's most significant and long-term procurement programs. Such awards provide a stable and predictable revenue stream for RTX's Pratt & Whitney division, which manufactures the F135.

For investors, continued government investment in upgrading and maintaining the F-35 fleet underscores the program's longevity and its importance to national security. The non-competitive nature of the award highlights the high barrier to entry and RTX's critical role within the defense industrial base.