F-22 RAM Program: $58.1M Undefinitized Contract for Generator Upgrades Awarded to Lockheed Martin

Contract Overview

Contract Amount: $58,110,970 ($58.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-11-04

End Date: 2030-06-30

Contract Duration: 2,795 days

Daily Burn Rate: $20.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS ORDER IS ISSUED AN UNDEFINITIZED CONTRACT ACTION (UCA) FOR EXECUTION YEAR 1 ON CLINS 0077 AND 0619, F-22 BULK MATERIALS AND NRE FOR RELIABILITY, AVAILABILITY, AND MAINTAINABILITY PROGRAM (RAMP) PROJECT EPS43R, MAIN GENERATOR IMPROVEMENTS.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $58.1 million to LOCKHEED MARTIN CORPORATION for work described as: THIS ORDER IS ISSUED AN UNDEFINITIZED CONTRACT ACTION (UCA) FOR EXECUTION YEAR 1 ON CLINS 0077 AND 0619, F-22 BULK MATERIALS AND NRE FOR RELIABILITY, AVAILABILITY, AND MAINTAINABILITY PROGRAM (RAMP) PROJECT EPS43R, MAIN GENERATOR IMPROVEMENTS. Key points: 1. This contract action represents a significant investment in the sustainment and modernization of the F-22 Raptor fleet. 2. The focus on Reliability, Availability, and Maintainability (RAMP) suggests a strategic effort to enhance operational readiness. 3. Awarded as an Undefinitized Contract Action (UCA), it indicates an immediate need for services before final terms are settled. 4. The substantial value points to complex technical requirements and potentially long-term sustainment needs for critical aircraft components. 5. The sole-source nature raises questions about cost control and the potential for competitive pricing in future actions. 6. The contract duration extends over several years, implying a phased approach to the generator improvements.

Value Assessment

Rating: questionable

As an Undefinitized Contract Action (UCA), the pricing and value are not yet fully established or negotiated. Comparing this to similar sustainment contracts for advanced fighter jets is difficult without finalized terms. However, the initial award amount of $58.1 million for generator improvements on a high-value platform like the F-22 warrants scrutiny to ensure cost-effectiveness once definitized. The Cost Plus Fixed Fee (CPFF) contract type means the government pays allowable costs plus a fixed fee, which can lead to cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Lockheed Martin Corporation, the prime contractor for the F-22 program. This approach is often used for specialized sustainment or upgrade work on complex weapon systems where the original equipment manufacturer possesses unique knowledge and capabilities. The lack of competition means that price discovery through a bidding process was bypassed, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure. Without competing the work, there is less assurance that the government is receiving the best possible price for these critical generator improvements.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-22 Raptor fleet, ensuring continued operational capability. The services delivered involve critical upgrades to main generators, enhancing the reliability and maintainability of the aircraft. The geographic impact is primarily within the operational bases of the F-22, though the contractor's facility in Texas is involved in execution. Workforce implications include specialized engineering, manufacturing, and maintenance personnel required for advanced aircraft systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Awarded as an Undefinitized Contract Action (UCA), indicating potential for cost growth during negotiation.
Sole-source award bypasses competitive processes, potentially leading to suboptimal pricing.
Cost Plus Fixed Fee (CPFF) contract type can incentivize cost escalation if not rigorously overseen.
Long contract duration (through 2030) increases exposure to potential scope creep and evolving requirements.
Lack of detailed performance metrics in the provided data makes assessing value for money challenging upfront.

Positive Signals

Focus on Reliability, Availability, and Maintainability (RAMP) addresses critical operational needs for the F-22.
Upgrades to main generators are essential for ensuring the long-term viability of a complex weapon system.
Awarding to the prime contractor (Lockheed Martin) leverages existing program knowledge and infrastructure.
The contract is structured to address specific technical improvements for a key defense asset.

Sector Analysis

The aerospace and defense sector is characterized by high-value, complex contracts often awarded to a limited number of prime contractors. Sustainment and upgrade programs like this are crucial for maintaining the readiness of aging but critical military platforms. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would involve analyzing other major platform sustainment contracts within the Department of Defense, which often run into hundreds of millions or billions of dollars over their lifecycle.

Small Business Impact

This contract was not set aside for small businesses, nor does the provided data indicate any specific subcontracting requirements for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Lockheed Martin actively pursues small business subcontractors for specific components or services. Further analysis would be needed to determine subcontracting plans and their adherence to small business utilization goals.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Air Force and potentially the Department of Defense's Inspector General. As an Undefinitized Contract Action (UCA), rigorous oversight during the definitization period is crucial to ensure fair and reasonable pricing. The Cost Plus Fixed Fee (CPFF) structure necessitates close monitoring of allowable costs and the fixed fee to prevent overruns. Transparency regarding the definitization process and final negotiated terms will be key accountability measures.

Related Government Programs

F-22 Raptor Sustainment Programs
Air Force Aircraft Maintenance Contracts
Avionics and Generator System Upgrades
Department of Defense Undefinitized Contract Actions
Lockheed Martin Defense Contracts

Risk Flags

Undefinitized Contract Action (UCA)
Sole-Source Award
Cost Plus Fixed Fee (CPFF) Contract Type
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.1 million to LOCKHEED MARTIN CORPORATION. THIS ORDER IS ISSUED AN UNDEFINITIZED CONTRACT ACTION (UCA) FOR EXECUTION YEAR 1 ON CLINS 0077 AND 0619, F-22 BULK MATERIALS AND NRE FOR RELIABILITY, AVAILABILITY, AND MAINTAINABILITY PROGRAM (RAMP) PROJECT EPS43R, MAIN GENERATOR IMPROVEMENTS.

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 $58.1 million.

What is the period of performance?

Start: 2022-11-04. End: 2030-06-30.

What is the track record of Lockheed Martin Corporation in managing similar F-22 sustainment and upgrade contracts?

Lockheed Martin Corporation, as the prime contractor for the F-22 program, has an extensive and long-standing track record in managing the sustainment and upgrade of this complex fighter jet. They have been involved since the aircraft's inception, handling everything from initial production to ongoing maintenance, logistics, and modernization efforts. Their experience includes managing large-scale, multi-year contracts with the Department of Defense, often involving advanced technologies and stringent performance requirements. While specific details on past performance for generator upgrades are not provided here, their overall history with the F-22 suggests a deep understanding of the platform's unique needs and challenges. However, like any large defense contractor, they have faced scrutiny on cost and schedule performance in various programs, underscoring the importance of robust government oversight.

How does the initial award value of $58.1 million compare to similar generator upgrade contracts for advanced fighter aircraft?

Directly comparing the $58.1 million initial award for F-22 generator upgrades to similar contracts is challenging without more specific data on the scope of work, technological complexity, and contract type (e.g., fixed-price vs. cost-plus). However, for advanced fighter platforms like the F-22, which utilize sophisticated and high-performance components, such figures are not uncommon for major system upgrades or sustainment efforts. The cost reflects the specialized nature of the work, the proprietary technology involved, and the rigorous testing and certification required. It's important to note that this is an initial award for an Undefinitized Contract Action (UCA), meaning the final definitized price could differ. Benchmarking would ideally involve looking at other sustainment contracts for aircraft like the F-35, F-15, or F-16, focusing on component-level upgrades or reliability enhancement programs.

What are the primary risks associated with awarding this contract as an Undefinitized Contract Action (UCA)?

The primary risk associated with awarding this contract as an Undefinitized Contract Action (UCA) is the potential for cost growth during the definitization period. A UCA allows work to begin before final contract terms, including price, are negotiated and agreed upon. This can lead to the government paying more than initially anticipated if the contractor's proposed costs are higher than expected or if scope creep occurs during the initial phase. There's also a risk that the government may not achieve the most favorable pricing due to the lack of upfront competitive negotiation. Furthermore, the extended period required to definitize a UCA can introduce schedule risks and administrative burdens. Effective oversight and a clear path to definitization are critical to mitigating these risks.

What does the Cost Plus Fixed Fee (CPFF) contract type imply for program effectiveness and cost control?

The Cost Plus Fixed Fee (CPFF) contract type implies that the government will reimburse the contractor for all allowable costs incurred during the performance of the contract, plus a predetermined fixed fee representing the contractor's profit. This structure is often used when the scope of work is not precisely defined or when there is significant uncertainty in the costs involved, as is common with research, development, or complex system upgrades. For program effectiveness, it can incentivize the contractor to proceed with the work, as costs are covered. However, for cost control, it presents a challenge. Since the contractor's fee is fixed, there is less financial incentive for them to control costs aggressively, as they will receive their fee regardless of the final cost incurred (provided costs are allowable). This places a greater burden on the government to meticulously monitor and audit costs to ensure they are reasonable and allocable.

How does the long contract duration (ending June 30, 2030) impact the overall value proposition for the F-22 program?

The long contract duration, extending nearly eight years from the award date, suggests that the generator improvements are part of a comprehensive, long-term strategy for enhancing the F-22's reliability and maintainability. This extended timeline allows for a phased implementation, potentially reducing disruption to operational schedules and enabling the integration of lessons learned throughout the process. From a value proposition standpoint, a longer duration can sometimes lead to economies of scale or more stable pricing if negotiated effectively. However, it also increases the government's exposure to potential risks such as technological obsolescence, changes in threat environments, or unforeseen cost increases over time. Ensuring that the contract includes mechanisms for periodic review, potential re-negotiation, or performance-based incentives will be crucial to maximizing its value proposition over its lifespan.

What is the significance of the North American Industry Classification System (NAICS) code 336411 (Aircraft Manufacturing) for this contract?

The NAICS code 336411, 'Aircraft Manufacturing,' signifies that the primary industry associated with this contract falls under the production of complete aircraft and their principal components. While this specific contract action focuses on generator improvements for the F-22, which is a sustainment and upgrade activity rather than new aircraft manufacturing, the code indicates the broader industrial context. It suggests that the work involves highly specialized manufacturing processes, advanced materials, and complex integration typical of the aerospace industry. Companies operating under this NAICS code are expected to adhere to stringent quality control, safety standards, and regulatory requirements set forth by agencies like the FAA and DoD. This classification helps in understanding the contractor's core competencies and the specialized nature of the services being procured.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: $143,843,898

Exercised Options: $80,356,520

Current Obligation: $58,110,970

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