DoD Awards $1.13B F-22 Sustainment Contract to Lockheed Martin, Raising Concerns Over Competition

Contract Overview

Contract Amount: $112,894,560 ($112.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2025-02-28

Contract Duration: 1,611 days

Daily Burn Rate: $70.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COMPREHENSIVE F-22 AIR VEHICLE SUSTAINMENT

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $112.9 million to LOCKHEED MARTIN CORPORATION for work described as: COMPREHENSIVE F-22 AIR VEHICLE SUSTAINMENT Key points: 1. Significant contract value of $1.13 billion for F-22 air vehicle sustainment. 2. Sole-source award to Lockheed Martin, limiting competitive pricing. 3. Potential risk of inflated costs due to lack of competition. 4. Contract falls within the Aircraft Manufacturing sector.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if the fixed fee is reasonable or if the overall cost is benchmarked against similar sustainment contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition likely hindered price discovery and may have resulted in higher costs for the government.

Taxpayer Impact: The absence of competition on this large contract could lead to taxpayers bearing a higher cost for F-22 sustainment than if multiple vendors had vied for the work.

Public Impact

Taxpayers may be overpaying for F-22 maintenance due to the sole-source nature of the award. The long duration of the contract (over 4 years) means sustained potential for uncompetitive pricing. Lack of transparency in pricing mechanisms for this critical defense asset.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition
High contract value

Positive Signals

Ensures continued sustainment of critical F-22 fleet
Long-term contract provides stability for the prime contractor

Sector Analysis

This contract for F-22 sustainment falls under the Aircraft Manufacturing sector. Spending in this sector is often characterized by high R&D costs and long product lifecycles, making competitive bidding crucial for cost control.

Small Business Impact

The data indicates this contract was awarded to Lockheed Martin Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight from the Department of the Air Force to ensure costs are reasonable and performance meets expectations. Robust auditing of the CPFF structure is essential for accountability.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of transparency in pricing.
High contract value increases potential financial risk.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.9 million to LOCKHEED MARTIN CORPORATION. COMPREHENSIVE F-22 AIR VEHICLE SUSTAINMENT

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 $112.9 million.

What is the period of performance?

Start: 2020-10-01. End: 2025-02-28.

What steps are being taken to ensure the 'fixed fee' portion of this Cost Plus Fixed Fee contract is fair and reasonable, given the sole-source award?

The Department of the Air Force should be conducting thorough audits and cost analyses to validate the reasonableness of the fixed fee. This includes reviewing Lockheed Martin's cost proposals, historical data, and industry benchmarks for similar services. Transparency in these reviews is key to ensuring taxpayer value and accountability for the awarded amount.

What is the long-term strategy for F-22 sustainment to introduce more competition and potentially reduce costs in future contracts?

The Air Force should explore strategies to break down future sustainment requirements into smaller, more competitive packages. This could involve encouraging new entrants or existing competitors to develop sustainment capabilities for specific F-22 components or systems. A phased approach to competition, starting with less critical elements, might also be feasible.

How does the current sole-source award impact the overall readiness and cost-effectiveness of the F-22 fleet compared to a scenario with competitive sustainment?

A sole-source award risks higher costs and potentially less innovation in sustainment compared to a competitive environment. Without competitive pressure, there's less incentive for the contractor to optimize efficiency or offer cost-saving solutions. This could lead to a higher overall cost of ownership for the F-22 fleet and potentially impact readiness if cost constraints lead to deferred maintenance.

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

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: $112,894,560

Exercised Options: $112,894,560

Current Obligation: $112,894,560

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