Air Force awards $30.6M contract for F-16 engineering support to Lockheed Martin

Contract Overview

Contract Amount: $30,572,839 ($30.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2017-03-01

End Date: 2018-02-28

Contract Duration: 364 days

Daily Burn Rate: $84.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: Defense

Official Description: IGF::OT::IGF F-16 ON-SITE TASK REQUEST FOR ENGINEERING AND CUSTOMER SUPPORT SERVICES

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $30.6 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF F-16 ON-SITE TASK REQUEST FOR ENGINEERING AND CUSTOMER SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Engineering services are critical for maintaining the F-16 fleet's operational readiness. 3. The contract duration of one year suggests a focus on immediate support needs. 4. The fixed-price contract type aims to control costs for defined tasks. 5. The award value represents a significant investment in sustainment for a key aircraft platform.

Value Assessment

Rating: fair

The contract value of $30.6 million for one year of engineering and customer support for the F-16 is substantial. Benchmarking this against similar sole-source sustainment contracts for major weapon systems is challenging due to the unique nature of F-16 support. However, the lack of competition inherently raises concerns about achieving the best possible value for taxpayer dollars. The fixed-price level of effort structure provides some cost control, but the absence of competitive bidding means a direct comparison to market rates for equivalent services is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. This approach is typically used when a specific contractor possesses unique capabilities or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in less favorable pricing for taxpayers compared to competitively awarded contracts.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-16 fighter jet fleet, ensuring continued operational capability. Services delivered include essential engineering and customer support for the F-16 aircraft. The contract has a geographic impact primarily within Texas, where the contractor is located. Workforce implications include the employment of engineers and support staff at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to fixed-price level of effort.

Positive Signals

Contract awarded to the original equipment manufacturer, ensuring specialized knowledge.
Fixed-price contract type provides cost certainty for defined tasks.
Focus on engineering and customer support directly addresses fleet readiness needs.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and a reliance on specialized engineering expertise. Contracts for sustainment and support of major weapon systems like the F-16 are crucial for maintaining national security. Lockheed Martin, as the original equipment manufacturer, holds a dominant position in F-16 support. Spending in this area is consistent with the overall defense budget allocation towards maintaining aging but critical platforms.

Small Business Impact

This contract does not appear to include specific small business set-asides. As a sole-source award to a large prime contractor, the opportunities for small businesses would likely be through subcontracting. The extent of small business participation would depend on Lockheed Martin's subcontracting plan and the availability of qualified small businesses for specific support tasks.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the fixed-price level of effort structure, requiring the contractor to deliver defined services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F-16 Sustainment Programs
Air Combat Command Support Contracts
Aerospace Engineering Services
Department of Defense Maintenance and Repair Contracts

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for cost inefficiencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.6 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF F-16 ON-SITE TASK REQUEST FOR ENGINEERING AND CUSTOMER SUPPORT 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 $30.6 million.

What is the period of performance?

Start: 2017-03-01. End: 2018-02-28.

What is Lockheed Martin Corporation's track record with F-16 sustainment contracts?

Lockheed Martin Corporation, as the original manufacturer of the F-16 Fighting Falcon, has an extensive and long-standing track record in providing sustainment, maintenance, and upgrade services for the aircraft. Their history includes numerous contracts with the U.S. Air Force and international F-16 operators, covering a wide range of support activities from depot maintenance and component repair to engineering services and logistics support. This deep institutional knowledge and established infrastructure position them as a primary, often sole-source, provider for critical F-16 sustainment needs. Their performance on previous contracts has generally been assessed as meeting requirements, though specific contract performance metrics and any associated issues are typically detailed in internal government performance reports and are not publicly disclosed in detail.

How does the value of this contract compare to similar F-16 support contracts?

Directly comparing the $30.6 million value of this specific one-year contract to other F-16 support contracts is complex due to variations in contract scope, duration, and the specific services provided. Sustainment costs for major weapon systems can fluctuate significantly year-to-year based on operational tempo, maintenance needs, and upgrade cycles. While $30.6 million is a substantial sum, it represents a portion of the total lifecycle cost for maintaining the F-16 fleet. Without access to detailed historical spending data for comparable engineering and customer support task orders under similar fixed-price level of effort structures, a precise value-for-money comparison is difficult. However, it is understood that sustainment of aging aircraft fleets represents a significant and ongoing investment for the Air Force.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for reduced value for taxpayer money due to the absence of competitive bidding. Without competing offers, there is less market pressure on Lockheed Martin to offer the lowest possible price for the engineering and customer support services. Another risk is the potential for scope creep or inefficiencies if the contract is not rigorously managed by the Air Force, despite the fixed-price level of effort structure. Furthermore, reliance on a single source can create vulnerabilities if the contractor faces unforeseen operational issues or if their strategic priorities shift away from supporting this specific platform, although this is less likely given Lockheed Martin's role as the OEM.

How effective is the fixed-price level of effort contract type in ensuring program effectiveness for F-16 support?

The fixed-price level of effort (FPLE) contract type aims to ensure program effectiveness by defining a specific level of effort (e.g., hours of labor) to be expended by the contractor for a fixed price. This structure provides cost certainty for the government, as the total price is established upfront for the agreed-upon effort. It is effective when the scope of work is relatively well-defined but the exact quantity of work is uncertain, or when the government wants to ensure a certain amount of contractor effort is dedicated to the task. For F-16 engineering and customer support, this means the Air Force is paying for a set amount of expert time and resources, which should contribute to maintaining the aircraft's readiness. However, effectiveness also relies on the quality of the effort provided and the government's ability to monitor that the defined effort is indeed being applied appropriately and efficiently.

What are the historical spending patterns for F-16 engineering and customer support services?

Historical spending on F-16 engineering and customer support services has been substantial and ongoing, reflecting the F-16's long service life and its continued importance in the Air Force's inventory. These services are part of the broader F-16 sustainment budget, which includes maintenance, repair, logistics, and upgrades. Annual spending can vary based on factors such as the operational tempo of the fleet, the age of the aircraft, and the implementation of new technologies or modifications. Contracts for these specific services, often awarded to Lockheed Martin as the OEM, typically represent millions of dollars annually, contributing to the overall multi-billion dollar lifecycle cost of operating and maintaining the F-16 fleet over several decades. Detailed historical spending figures for specific task orders like this one are often aggregated within broader program budgets.

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

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

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: $30,572,839

Exercised Options: $30,572,839

Current Obligation: $30,572,839

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline