DoD Awards $167M F-22 Sustainment Contract to Lockheed Martin, Raising Concerns Over Competition
Contract Overview
Contract Amount: $167,288,732 ($167.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-10-04
End Date: 2024-06-21
Contract Duration: 2,087 days
Daily Burn Rate: $80.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: COMPREHENSIVE F-22 AIR VEHICLE SUSTAINMENT SERVICES
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $167.3 million to LOCKHEED MARTIN CORPORATION for work described as: COMPREHENSIVE F-22 AIR VEHICLE SUSTAINMENT SERVICES Key points: 1. Significant contract value of $167.3 million for F-22 air vehicle sustainment. 2. Sole-source award to Lockheed Martin Corporation, limiting competitive pricing. 3. Potential risk associated with single-source provider for critical aircraft maintenance. 4. Contract falls under the Aircraft Manufacturing sector, with a high NAICS code. 5. Long contract duration of 2087 days indicates ongoing sustainment needs.
Value Assessment
Rating: questionable
The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed tightly. Benchmarking against similar sole-source sustainment contracts for advanced aircraft is difficult due to limited public data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin Corporation. The lack of competition likely prevented price discovery through market forces, potentially leading to higher costs for the government.
Taxpayer Impact: The absence of competition for this substantial contract raises concerns about taxpayer value, as the government may not be securing the most cost-effective solution for F-22 sustainment.
Public Impact
Taxpayers may be overpaying for F-22 sustainment due to the lack of competitive bidding. The long-term reliance on a single provider could impact the Air Force's ability to adapt to evolving maintenance needs or technologies. The F-22 fleet's operational readiness could be indirectly affected if sustainment costs become prohibitive or service quality declines without competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Long contract duration
Positive Signals
- Essential sustainment for a critical advanced aircraft
- Established provider with deep knowledge of the F-22 platform
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for the sustainment of the F-22 Raptor. Spending benchmarks for sole-source sustainment of advanced military aircraft are often high due to specialized knowledge and proprietary data requirements.
Small Business Impact
The data provided does not indicate any specific provisions or set-asides for small businesses in this contract. As a sole-source award to a large corporation, opportunities for small businesses are likely limited unless subcontracted by the prime.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight from the Department of the Air Force to ensure cost reasonableness and performance standards are met. Robust auditing of costs under the Cost Plus Fixed Fee structure is crucial for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Cost Plus Fixed Fee contracts can lead to cost overruns.
- Lack of competition may result in higher taxpayer costs.
- Potential for vendor lock-in with a single provider.
- Limited transparency on pricing benchmarks due to sole-source nature.
Tags
aircraft-manufacturing, department-of-defense, tx, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $167.3 million to LOCKHEED MARTIN CORPORATION. COMPREHENSIVE F-22 AIR VEHICLE SUSTAINMENT SERVICES
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $167.3 million.
What is the period of performance?
Start: 2018-10-04. End: 2024-06-21.
What is the justification for awarding this F-22 sustainment contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically stems from unique capabilities or proprietary data held by the incumbent contractor. To ensure fair pricing, the government should conduct thorough cost analyses, benchmark against similar sole-source contracts where possible, and implement stringent oversight of the Cost Plus Fixed Fee structure to prevent unnecessary expenditures and ensure value for taxpayer dollars.
What are the potential risks to F-22 operational readiness and long-term sustainment costs given the lack of competition?
The lack of competition poses risks of inflated costs due to the absence of market pressure, potentially limiting the Air Force's budget for other critical needs. Long-term sustainment could also be jeopardized if the sole provider faces financial instability or decides to exit the market. Furthermore, without competitive innovation, the sustainment approach might become outdated, impacting the F-22's operational readiness and lifespan.
How does this contract's structure and award method align with the government's goals for achieving best value and promoting technological advancement in defense sustainment?
A sole-source, Cost Plus Fixed Fee contract for sustainment generally does not align well with achieving best value through competition or fostering technological advancement. Best value is typically realized through competitive processes that drive innovation and cost efficiency. While this contract ensures continuity, it misses opportunities to incentivize new solutions or more cost-effective maintenance strategies that could emerge in a competitive environment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA820516R0001
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1 LOCKHEED BLVD BLDG 10, FORT WORTH, TX, 76108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $167,288,732
Exercised Options: $167,288,732
Current Obligation: $167,288,732
Actual Outlays: $2,400,223
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA820518D0001
IDV Type: IDC
Timeline
Start Date: 2018-10-04
Current End Date: 2024-06-21
Potential End Date: 2024-06-21 00:00:00
Last Modified: 2025-03-24
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