DoD's $19M SSI-K Production Contract Awarded to Lockheed Martin Services for Aircraft Manufacturing

Contract Overview

Contract Amount: $18,998,607 ($19.0M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Defense

Start Date: 2007-06-26

End Date: 2012-12-31

Contract Duration: 2,015 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SSI-K PRODUCTION INSTALL

Place of Performance

Location: GREENVILLE, GREENVILLE County, SOUTH CAROLINA, 29605

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to LOCKHEED MARTIN SERVICES, LLC for work described as: SSI-K PRODUCTION INSTALL Key points: 1. Contract value of $18.99M over its period of performance. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The contract was for aircraft manufacturing support, a critical defense capability. 4. Performance period spanned over five years, indicating a long-term need. 5. The contract type was Firm Fixed Price, which shifts cost risk to the contractor. 6. The contractor, Lockheed Martin Services, LLC, is a major defense industry player.

Value Assessment

Rating: good

The contract value of approximately $19 million for aircraft manufacturing support appears reasonable given the duration and the nature of the services. Benchmarking against similar large-scale defense manufacturing contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the government secured predictable costs, although the ultimate value depends on the quality and timeliness of the delivered product.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this requirement. While not a large number of bidders, full and open competition generally promotes price discovery and encourages contractors to offer competitive terms.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, is generally favorable for taxpayers as it aims to secure the best possible price and value through a structured bidding process.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring the manufactured aircraft or components. Services delivered likely include the production or modification of aircraft systems. The geographic impact is centered around the contractor's facilities in South Carolina. Workforce implications include employment opportunities for skilled labor in aircraft manufacturing and related fields within South Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract did not adequately account for all production complexities.
Risk of schedule delays impacting defense readiness if production targets are not met.
Dependence on a single contractor for a critical defense manufacturing need.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Award to a well-established defense contractor like Lockheed Martin suggests a higher likelihood of successful execution.
Long performance period allows for sustained production and potential economies of scale.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, a significant segment of the U.S. industrial base. The market is characterized by high barriers to entry, substantial R&D investment, and long-standing relationships between government agencies and prime contractors. Spending in this sector is driven by national security requirements and technological advancements in military aviation.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was awarded to a large prime contractor and there is no explicit mention of small business set-asides or subcontracting goals. This suggests that opportunities for small businesses may have been limited to lower-tier supply chain roles, rather than direct prime contracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance, quality, and compliance with contract terms. The firm fixed-price nature of the contract implies that the government's primary oversight focus would be on delivery and acceptance, rather than detailed cost monitoring. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Aircraft Production Contracts
Defense Manufacturing Support
Lockheed Martin Contracts
Department of Defense Procurement

Risk Flags

Contract Duration
Contract Type
Sole Source Potential
Small Business Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to LOCKHEED MARTIN SERVICES, LLC. SSI-K PRODUCTION INSTALL

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.0 million.

What is the period of performance?

Start: 2007-06-26. End: 2012-12-31.

What is the historical spending trend for SSI-K Production and similar aircraft manufacturing contracts within the Department of Defense?

Analyzing historical spending for SSI-K Production and comparable aircraft manufacturing contracts within the DoD reveals patterns of sustained investment in aviation capabilities. While specific historical data for 'SSI-K Production' is not detailed here, contracts of this nature typically represent significant, multi-year commitments. The DoD's overall budget allocation for aircraft procurement and sustainment often runs into billions of dollars annually. Factors influencing spending include technological upgrades, fleet modernization programs, geopolitical demands, and the lifecycle of existing aircraft. Contracts like this one, awarded under firm fixed-price terms, aim to provide cost predictability for these substantial investments. Benchmarking this $19 million award against the broader context of DoD aviation spending suggests it is a component of a larger strategic acquisition or sustainment effort, rather than a standalone, massive program.

How does the awarded amount of $18.99 million compare to the estimated value or budget for similar aircraft manufacturing contracts?

The $18.99 million award for SSI-K Production needs to be contextualized within the vast landscape of defense contracts. Aircraft manufacturing can range from component production to full aircraft assembly, with costs varying dramatically. A contract of this size might represent the production of a specific sub-system, a limited batch of aircraft, or specialized manufacturing support. For instance, the development and production of a new fighter jet can cost billions, while a contract for specialized components or modifications might fall within the tens of millions. Without knowing the exact scope of 'SSI-K Production,' direct comparison is challenging. However, within the realm of specialized defense manufacturing, $19 million is a substantial but not extraordinary figure, suggesting a focused scope of work rather than a program for an entire new aircraft type.

What are the key performance indicators (KPIs) typically associated with aircraft manufacturing contracts, and how might they apply here?

Key performance indicators for aircraft manufacturing contracts generally revolve around quality, schedule adherence, and cost control. For this contract, specific KPIs would likely include meeting production milestones on time, ensuring manufactured components or aircraft meet stringent quality and safety standards (e.g., defect rates, compliance with aerospace specifications), and delivering within the firm fixed-price budget. Given the contractor is Lockheed Martin Services, LLC, a major player, expectations for performance are typically high. The DoD would monitor delivery schedules closely, as delays can impact operational readiness. Quality assurance would involve rigorous testing and inspection protocols. The firm fixed-price nature incentivizes the contractor to manage costs effectively to maintain profitability.

What is Lockheed Martin Services, LLC's track record with similar DoD aircraft manufacturing contracts?

Lockheed Martin Services, LLC, as a subsidiary of Lockheed Martin Corporation, possesses an extensive and well-documented track record in defense contracting, including significant experience in aircraft manufacturing and support. The corporation is a prime contractor for numerous major U.S. military aircraft programs, such as the F-35, F-16, C-130, and various advanced missile systems. Their history includes large-scale production runs, complex system integration, and long-term sustainment services. While specific performance details for the 'SSI-K Production' contract (awarded in 2007) are not provided here, Lockheed Martin's overall standing in the industry suggests a capacity to handle complex manufacturing requirements. Past performance evaluations, often available through government contract databases, would offer more granular insights into their success rates, on-time delivery, and quality metrics for similar projects.

What are the potential risks associated with a firm fixed-price contract for aircraft manufacturing, and how are they mitigated?

Firm fixed-price (FFP) contracts place the primary cost risk on the contractor. For aircraft manufacturing, potential risks include underestimating production costs, encountering unforeseen technical challenges, material price fluctuations, or labor cost increases. If these risks materialize, the contractor may face reduced profit margins or even losses. Mitigation strategies employed by the government include thorough pre-award cost analysis, ensuring the solicitation clearly defines the scope of work, and requiring detailed technical proposals. The contractor mitigates risks through robust project management, accurate cost estimation, hedging against material price volatility, and efficient production processes. The government's mitigation involves careful contractor selection based on past performance and financial stability, and clear contract terms that define deliverables and acceptance criteria.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 400 BROOKFIELD PARKWAY, GREENVILLE, SC, 29607

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,998,607

Exercised Options: $18,998,607

Current Obligation: $18,998,607

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001905D0013

IDV Type: IDC

Timeline