DoD awards $67.6M F-16 Engineering Services contract to Lockheed Martin, raising competition concerns
Contract Overview
Contract Amount: $67,563,587 ($67.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2016-03-01
End Date: 2018-02-28
Contract Duration: 729 days
Daily Burn Rate: $92.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::CL,CT::IGF ENGINEERING SERVICES FOR F-16 FY16/FY17 FALCON 2020 CORE SUPPORT
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $67.6 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::CL,CT::IGF ENGINEERING SERVICES FOR F-16 FY16/FY17 FALCON 2020 CORE SUPPORT Key points: 1. Significant contract value awarded to a single, incumbent provider. 2. Lack of competition may lead to suboptimal pricing and innovation. 3. Potential for cost overruns due to limited market pressure. 4. Engineering services sector often sees incumbent advantage, but full and open competition is preferred.
Value Assessment
Rating: questionable
The contract's price of $67.6 million for engineering services over two years appears high given the lack of competitive bidding. Benchmarking against similar F-16 support contracts is difficult without more data, but the absence of competition suggests potential for inflated costs.
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 limits price discovery and potentially allows the incumbent to charge higher prices than might be achieved in a competitive environment.
Taxpayer Impact: Taxpayers may be overpaying for engineering services due to the lack of competitive pressure, diverting funds that could be used for other critical defense needs.
Public Impact
F-16 aircraft sustainment is critical for national security, impacting readiness. Taxpayer funds are being allocated to a sole-source contract, potentially reducing value for money. Lack of transparency in pricing due to non-competitive award. Future sustainment costs for aging aircraft fleets could be impacted by this precedent.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Limited transparency
Positive Signals
- Addresses critical F-16 sustainment needs
- Incumbent expertise likely ensures continuity
Sector Analysis
This contract falls within engineering services for defense, a sector where incumbent contractors often have significant advantages due to specialized knowledge and existing infrastructure. Benchmarks for similar sole-source engineering contracts are difficult to establish, but competition is generally expected to yield better pricing.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature of the award to a large corporation like Lockheed Martin likely excluded opportunities for small business participation.
Oversight & Accountability
The Department of the Air Force awarded this contract. Oversight should focus on ensuring that the firm-fixed-price contract terms are adhered to and that Lockheed Martin is delivering the required engineering services efficiently, despite the lack of competition.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- No small business participation evident
- High contract value awarded non-competitively
Tags
engineering-services, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $67.6 million to LOCKHEED MARTIN CORPORATION. IGF::CL,CT::IGF ENGINEERING SERVICES FOR F-16 FY16/FY17 FALCON 2020 CORE SUPPORT
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 $67.6 million.
What is the period of performance?
Start: 2016-03-01. End: 2018-02-28.
What was the justification for not competing this significant engineering services contract for the F-16 program?
The justification for a sole-source award typically involves factors such as unique capabilities, proprietary data, or urgent needs that cannot be met by other sources within the required timeframe. Without specific documentation, it's difficult to ascertain the precise rationale, but it's crucial for the agency to have robust justification to ensure taxpayer funds are used appropriately.
How does the pricing of this contract compare to industry benchmarks for similar F-16 sustainment engineering services, considering the sole-source nature?
Direct comparison is challenging without access to detailed cost breakdowns and specific service levels. However, sole-source contracts inherently lack the price discovery mechanism of competition. Therefore, it is reasonable to assume that the pricing may be higher than if the contract had been competed, potentially exceeding typical industry benchmarks for comparable services.
What measures are in place to ensure the effectiveness and efficiency of Lockheed Martin's engineering services under this non-competed contract?
Effectiveness and efficiency are typically ensured through robust contract management, performance metrics, and clear deliverables outlined in the contract. The Air Force contracting officers must actively monitor Lockheed Martin's performance against these requirements, conduct regular reviews, and ensure that the services provided meet the necessary standards for F-16 sustainment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $70,118,067
Exercised Options: $70,118,067
Current Obligation: $67,563,587
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F4262001D0058
IDV Type: IDC
Timeline
Start Date: 2016-03-01
Current End Date: 2018-02-28
Potential End Date: 2018-02-28 00:00:00
Last Modified: 2019-02-15
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