DoD awards $43.1M for aircraft batteries, with Lockheed Martin as sole source

Contract Overview

Contract Amount: $43,123,874 ($43.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-07-30

End Date: 2029-06-30

Contract Duration: 1,796 days

Daily Burn Rate: $24.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MAIN AIRCRAFT BATTERY

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $43.1 million to LOCKHEED MARTIN CORPORATION for work described as: MAIN AIRCRAFT BATTERY Key points: 1. Value for money is difficult to assess due to sole-source nature and lack of competitive bidding. 2. Competition dynamics are non-existent, as the contract was awarded without competition. 3. Risk indicators include potential for overpricing and limited innovation due to sole-source award. 4. Performance context is tied to aircraft manufacturing, specifically for the Air Force. 5. Sector positioning is within the defense industrial base, focusing on critical aircraft components.

Value Assessment

Rating: questionable

Without competitive bidding, it is challenging to benchmark the value for money. The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely managed. Comparing this to similar sole-source procurements for specialized aircraft components is difficult without more market data, but the lack of competition inherently raises concerns about pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were solicited or considered. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The absence of competition limits price discovery and may result in higher costs than if multiple bids were received.

Taxpayer Impact: Taxpayers may be paying a premium for this aircraft battery due to the lack of competitive pressure. The government has fewer options to negotiate down prices when only one supplier is available.

Public Impact

The primary beneficiary is the Department of the Air Force, ensuring operational readiness of aircraft. Services delivered include the provision of critical aircraft batteries, essential for flight operations. Geographic impact is primarily within the operational theaters of the U.S. Air Force. Workforce implications are indirect, supporting the manufacturing and maintenance sectors related to aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of competition may stifle innovation and reduce vendor responsiveness.
CPFF contract type requires robust oversight to control costs and prevent contractor inefficiencies.

Positive Signals

Ensures supply of critical components for Air Force aircraft, supporting national security.
Lockheed Martin is a major defense contractor with established expertise in aerospace manufacturing.
Contract duration provides a stable supply chain for essential parts over several years.

Sector Analysis

The defense aerospace sector is characterized by high barriers to entry, complex supply chains, and significant government oversight. This contract for aircraft batteries fits within the broader aircraft manufacturing sub-sector, which is a critical component of the defense industrial base. Spending in this area is often driven by specific platform requirements and long-term sustainment needs, with limited market alternatives for specialized components.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature and the prime contractor being Lockheed Martin, subcontracting opportunities for small businesses would depend on Lockheed Martin's internal procurement practices and any flow-down requirements from the government, which are not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to contract performance clauses and financial reporting requirements. Transparency may be limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Component Procurement
Defense Logistics Agency (DLA) Contracts
Air Force Sustainment Programs
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.1 million to LOCKHEED MARTIN CORPORATION. MAIN AIRCRAFT BATTERY

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 $43.1 million.

What is the period of performance?

Start: 2024-07-30. End: 2029-06-30.

What is the historical spending pattern for this specific aircraft battery or similar components under previous contracts?

Analyzing historical spending for this specific aircraft battery or comparable components is crucial for assessing value. Without access to prior contract data for this exact item, we can infer potential trends from broader spending on aircraft batteries within the Air Force. Typically, specialized components for military aircraft can see significant year-over-year spending, influenced by fleet size, operational tempo, and technological obsolescence. If previous contracts for similar batteries were also sole-source or awarded to Lockheed Martin, it might indicate a consistent, albeit potentially less competitive, procurement channel. Conversely, if there were prior competitive awards or different suppliers, the current sole-source award warrants closer scrutiny regarding justification and pricing.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar sole-source procurements?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense procurement, especially for complex systems or when the scope of work is not fully defined at the outset. For sole-source awards, CPFF can be a point of concern regarding value for money. Industry standards for CPFF often involve rigorous government oversight to ensure costs are reasonable and the fixed fee adequately compensates the contractor for their effort without incentivizing excessive spending. Benchmarking this specific contract's fee against similar sole-source CPFF agreements for aerospace components is challenging without proprietary data. However, the inherent risk of cost escalation in CPFF, coupled with the absence of competition, suggests that taxpayers may be exposed to higher prices compared to fixed-price contracts or competitively awarded agreements.

What are the specific risks associated with a sole-source award for critical aircraft components like batteries?

A sole-source award for critical aircraft components like batteries presents several risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer competitive rates. Secondly, it can stifle innovation; without the threat of losing future business to competitors, the incumbent contractor may have less incentive to invest in improving product performance or reducing manufacturing costs. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch suppliers in the future, even if better alternatives emerge. Finally, sole-source awards can raise concerns about the justification process, potentially masking a failure to adequately explore competitive options or leading to perceptions of favoritism.

What is Lockheed Martin's track record with the Air Force for similar component procurements?

Lockheed Martin has an extensive and long-standing relationship with the Department of the Air Force, serving as a prime contractor for numerous major aircraft programs, including fighters, transport, and specialized mission aircraft. Their track record typically involves complex manufacturing, systems integration, and long-term sustainment. For component procurements, their performance is generally viewed through the lens of overall program success. While they possess significant technical expertise and production capacity, past performance reviews and contract audits would provide a more granular understanding of their efficiency, cost control, and adherence to delivery schedules for specific component types. Given their size and scope, occasional performance issues or cost variances are not uncommon, but they are generally considered a reliable, albeit expensive, supplier for critical defense systems.

Are there any alternative suppliers or technologies that could be considered in the future to foster competition?

Exploring alternative suppliers or technologies is a key strategy to mitigate the risks of sole-source procurement and foster future competition. For aircraft batteries, this could involve investigating other established aerospace component manufacturers, emerging technology firms specializing in battery advancements (e.g., solid-state batteries, improved energy density chemistries), or even potential dual-use technologies from the commercial sector that could be adapted for military use. The feasibility of introducing alternatives depends on factors like required performance specifications, certification processes, integration challenges with existing aircraft systems, and the overall cost-benefit analysis. Proactive market research and technology insertion programs by the Air Force are essential to identify and cultivate potential future competitors.

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: $59,078,219

Exercised Options: $59,078,219

Current Obligation: $43,123,874

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