Lockheed Martin awarded $621M for ISR management, with a significant portion for airframes and spares

Contract Overview

Contract Amount: $124,665,912 ($124.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2004-12-01

End Date: 2010-05-30

Contract Duration: 2,006 days

Daily Burn Rate: $62.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: 200508!000082!5700!FA8528!WR-ALC-LXKB ISR MGNT DIR !FA852805D0015 !A!N! !Y!0001 ! !20041201!20050930!619434590!619434590!834951691!N!LOCKHEED MARTIN CORPORATION !1011 LOCKHEED WAY !PALMDALE !CA!93599!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000033501582!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !20200930!B! ! !N!Z!D!N!V!1!001!N!6A!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $124.7 million to LOCKHEED MARTIN CORPORATION for work described as: 200508!000082!5700!FA8528!WR-ALC-LXKB ISR MGNT DIR !FA852805D0015 !A!N! !Y!0001 ! !20041201!20050930!619434590!619434590!834951691!N!LOCKHEED MARTIN CORPORATION !1011 LOCKHEED WAY !PALMDALE !CA!93599!55156!037!06!PALMDALE !LOS … Key points: 1. Contract value of $621.5 million for ISR management services. 2. Significant portion allocated to airframes and spares, indicating hardware-related needs. 3. Contract awarded as 'Not Competed', raising questions about competition and potential cost efficiencies. 4. Long performance period of approximately 6 years suggests a sustained need for these services. 5. Prime contractor is Lockheed Martin Corporation, a major defense industry player. 6. Contract falls under the 'Other Professional Services' category, with a specific focus on ISR management.

Value Assessment

Rating: fair

The total contract value of $621.5 million is substantial. Without specific benchmarks for ISR management services or comparable airframe/spare contracts, a precise value-for-money assessment is difficult. However, the 'Not Competed' nature of the award warrants scrutiny regarding whether the pricing reflects competitive market rates. The contract type 'COST NO FEE' suggests that the government bears the cost, and the contractor is reimbursed for allowable costs without an additional fee, which can sometimes lead to less incentive for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'Not Competed' (sole-source). This indicates that the agency did not solicit bids from multiple offerors. Reasons for sole-source awards can include a lack of available competition, urgent and compelling needs, or specific capabilities possessed by only one contractor. The absence of a competitive bidding process means that price discovery through market forces was limited, potentially leading to higher costs for the government.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the cost savings that typically arise from a competitive bidding process. This could result in a higher overall expenditure for the services and goods procured under this contract.

Public Impact

The primary beneficiaries are likely military intelligence and operational units requiring Intelligence, Surveillance, and Reconnaissance (ISR) management. Services delivered include management of ISR systems and potentially the provision of related airframes and spare parts. Geographic impact is likely global, supporting deployed military operations. Workforce implications include support for specialized technical and management personnel within Lockheed Martin and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award raises concerns about the agency's justification for not seeking competitive bids.
The 'COST NO FEE' contract type might reduce contractor incentive for cost efficiency.

Positive Signals

Contract awarded to a major defense contractor with established expertise in ISR and aerospace.
Long contract duration suggests a critical and ongoing need for these services.
The contract specifies a clear focus on ISR management and related hardware.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on Intelligence, Surveillance, and Reconnaissance (ISR) management. The ISR market is a significant segment of defense spending, encompassing a wide range of technologies and services from sensor development to data analysis and platform integration. Comparable spending benchmarks would typically involve other large-scale ISR support contracts, often awarded to prime defense contractors like Lockheed Martin, Boeing, and Northrop Grumman. The allocation for airframes and spares suggests a connection to aviation platforms integral to ISR missions.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting plans within the provided data. As a sole-source award to a large prime contractor, the extent of small business participation would depend on Lockheed Martin's internal subcontracting strategies and any specific requirements imposed by the contracting agency outside of the primary award terms. Without this information, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve a tiered subcontracting structure.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. Accountability measures are inherent in the 'COST NO FEE' structure, where costs are reimbursed but without profit, focusing oversight on allowable costs. Transparency is limited due to the sole-source nature of the award; however, contract modifications and performance reports would be subject to internal agency review and potentially Inspector General oversight if performance issues or fraud are suspected.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Programs
Aircraft Manufacturing and Maintenance
Defense Logistics and Support Services
Aerospace Systems Procurement

Risk Flags

Sole-source award lacks competitive pricing.
Cost-reimbursement nature without fee may reduce cost-control incentives.
Potential for cost overruns due to 'COST NO FEE' structure.
Lack of transparency regarding specific ISR management functions and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $124.7 million to LOCKHEED MARTIN CORPORATION. 200508!000082!5700!FA8528!WR-ALC-LXKB ISR MGNT DIR !FA852805D0015 !A!N! !Y!0001 ! !20041201!20050930!619434590!619434590!834951691!N!LOCKHEED MARTIN CORPORATION !1011 LOCKHEED WAY !PALMDALE !CA!93599!55156!037!06!PALMDALE !LOS ANGELES !CALIFORNIA!+000033501582!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $124.7 million.

What is the period of performance?

Start: 2004-12-01. End: 2010-05-30.

What specific ISR management functions does this contract cover, and how do they align with current military needs?

The contract specifies 'WR-ALC-LXKB ISR MGNT DIR' and falls under 'OTHER PROFESSIONAL SERVICES' with a primary focus on 'AIRFRAMES AND SPARES'. This suggests the contract encompasses the management of Intelligence, Surveillance, and Reconnaissance (ISR) systems, potentially including the operational readiness, maintenance, and logistical support of ISR-capable aircraft (airframes) and their associated components (spares). The 'ISR MGNT DIR' likely refers to a specific directorate within the Warner Robins Air Logistics Complex responsible for overseeing these functions. The alignment with current military needs would depend on the specific platforms and intelligence requirements prioritized by the Department of Defense during the contract's performance period (2004-2010), which included significant global operations.

Can the 'Not Competed' status be justified based on the nature of ISR management and airframe/spare requirements?

The justification for a 'Not Competed' status often relies on factors such as unique capabilities, urgent needs, or the unavailability of alternative sources. For ISR management, specialized knowledge of specific systems, intelligence requirements, and existing infrastructure might be cited. Similarly, for airframes and spares, if the contract pertains to unique or legacy platforms where Lockheed Martin is the sole manufacturer or possesses exclusive technical data, a sole-source award could be deemed necessary. However, without the specific justification documentation (e.g., Justification and Approval - J&A), it's difficult to definitively assess the validity of the sole-source award. Agencies are required to document why full and open competition is not feasible.

How does the 'COST NO FEE' contract type impact contractor performance and government oversight in ISR management?

A 'Cost No Fee' (CNF) contract reimburses the contractor for all allowable costs incurred in performing the contract but does not provide any additional profit or fee. This type of contract is typically used when the scope of work is uncertain, or when the government has a strong interest in ensuring the service is performed without the contractor seeking profit, such as in certain research or urgent support scenarios. For ISR management and airframe/spare support, the CNF structure places the entire financial risk on the government. While it might incentivize the contractor to perform the required tasks, it also reduces the contractor's motivation to control costs aggressively, as they are guaranteed cost recovery without profit. Government oversight must be particularly rigorous to ensure that all claimed costs are allowable, reasonable, and allocable.

What is the historical spending trend for ISR management and related airframe/spare support by the Department of Defense?

The Department of Defense has consistently allocated substantial funding towards Intelligence, Surveillance, and Reconnaissance (ISR) capabilities over the past two decades, driven by evolving geopolitical landscapes and the need for persistent battlefield awareness. Spending in this area encompasses a wide array of platforms (drones, manned aircraft, satellites), sensors, data processing, and support services. Contracts for ISR management, including the maintenance and supply of related airframes and spares, represent a significant portion of this investment. Historical data would show a general upward trend in ISR spending, particularly following the conflicts in Afghanistan and Iraq, with major defense contractors like Lockheed Martin being primary recipients of such contracts. This specific $621 million award is one component of a much larger, ongoing defense expenditure in the ISR domain.

What is Lockheed Martin's track record with similar ISR management and aerospace support contracts?

Lockheed Martin Corporation has an extensive and well-established track record in providing ISR management, aerospace systems, and logistical support to the Department of Defense and other government agencies. As one of the largest defense contractors globally, they are involved in numerous programs related to aircraft development, maintenance, sensor integration, and intelligence analysis. Their portfolio includes major ISR platforms like the U-2, RQ-170 Sentinel, and various C-130 variants, many of which require ongoing management, airframe support, and spare parts. Given their deep involvement in the defense sector and long history with complex aerospace programs, their capability to manage such contracts is generally considered high, although performance can vary across individual contracts and programs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1011 LOCKHEED WAY, PALMDALE, CA, 93599

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA852805D0015

IDV Type: IDC

Timeline