F-16 SLEP Tooling contract awarded to Lockheed Martin for $33.8M, highlighting sole-source procurement in defense engineering

Contract Overview

Contract Amount: $33,800,080 ($33.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-03-30

End Date: 2021-04-30

Contract Duration: 396 days

Daily Burn Rate: $85.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-16 SERVICE LIFE EXTENSION PROGRAM (SLEP TOOLING.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $33.8 million to LOCKHEED MARTIN CORPORATION for work described as: F-16 SERVICE LIFE EXTENSION PROGRAM (SLEP TOOLING. Key points: 1. The contract value of $33.8 million for F-16 SLEP tooling suggests significant investment in maintaining aging aircraft fleets. 2. Sole-source procurement raises questions about potential cost efficiencies and the availability of competitive alternatives. 3. The fixed-price contract type aims to provide cost certainty for the government, shifting performance risk to the contractor. 4. The duration of the contract (396 days) indicates a focused effort on specific tooling requirements for the SLEP program. 5. This award falls within the engineering services sector, crucial for complex defense systems like the F-16. 6. The geographic location in Texas for contract performance may indicate specialized facilities or workforce availability.

Value Assessment

Rating: fair

Benchmarking the value of this specific tooling contract is challenging without comparable sole-source awards for F-16 SLEP tooling. However, the $33.8 million price tag for engineering services related to aircraft sustainment is substantial. Given the sole-source nature, it's difficult to assess if this represents a competitive price. Further analysis would require understanding the scope of the tooling and comparing it to industry standards for similar defense sustainment projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means there was no direct price comparison through bidding, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, the government has less leverage to negotiate the lowest possible price for the required tooling.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially allied nations operating F-16 aircraft, ensuring continued operational readiness. The services delivered involve the development and provision of specialized tooling essential for the F-16 Service Life Extension Program. The geographic impact is centered in Texas, where the contractor is located, suggesting potential local economic benefits. Workforce implications include the employment of engineers and technicians skilled in aerospace manufacturing and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Dependence on a single contractor for critical sustainment tooling.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Focus on a specific, critical program (F-16 SLEP) indicates strategic investment.
Contract awarded to a known incumbent with established expertise in F-16 systems.

Sector Analysis

This contract falls within the aerospace and defense engineering services sector, a critical component of national security spending. The market for specialized aircraft sustainment and upgrade tooling is often dominated by original equipment manufacturers due to proprietary knowledge and complex integration requirements. The F-16 SLEP is a significant program aimed at extending the operational life of a widely used fighter jet, underscoring the importance of such specialized engineering support. Comparable spending benchmarks are difficult to establish due to the niche nature of tooling and the sole-source award.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the prime contractor being Lockheed Martin Corporation. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The focus on specialized tooling for a major defense platform suggests that prime contractors often handle the core requirements internally or through established large-subcontractor relationships, potentially limiting direct opportunities for smaller firms in this particular instance.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the performance or award of the contract.

Related Government Programs

F-16 Fighting Falcon Sustainment
Air Force Materiel Command Contracts
Aerospace Engineering Services
Defense Production Act Investments
Aircraft Modernization Programs

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.8 million to LOCKHEED MARTIN CORPORATION. F-16 SERVICE LIFE EXTENSION PROGRAM (SLEP TOOLING.

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 $33.8 million.

What is the period of performance?

Start: 2020-03-30. End: 2021-04-30.

What is the specific scope of the tooling being provided under this contract?

The data provided indicates the contract is for 'F-16 SERVICE LIFE EXTENSION PROGRAM (SLEP TOOLING.' This suggests the tooling is specifically designed to facilitate the processes involved in extending the service life of the F-16 aircraft. This could include specialized jigs, fixtures, diagnostic equipment, or manufacturing aids required for structural repairs, component upgrades, or system modifications as part of the SLEP. Without more detailed documentation, the precise nature and complexity of the tooling remain unspecified, making a precise cost-benefit analysis difficult.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For defense programs like the F-16 SLEP, this could be due to proprietary tooling designs held exclusively by Lockheed Martin, the original manufacturer, or a unique capability required that no other firm possesses. The urgency of the SLEP requirements might also preclude a lengthy competitive process. The specific justification for this sole-source award would be documented in the contract file, often citing reasons like technical expertise, existing infrastructure, or lack of viable alternatives.

How does the $33.8 million cost compare to similar F-16 sustainment or upgrade contracts?

Direct comparison of this $33.8 million tooling contract to other F-16 sustainment or upgrade contracts is challenging due to the specialized nature of 'tooling' versus broader service or upgrade packages. However, the amount is significant and reflects the complexity and criticality of SLEP requirements. To benchmark effectively, one would need to identify contracts specifically for the development or procurement of specialized manufacturing or maintenance tooling for other major aircraft platforms, or previous F-16 tooling efforts, ideally through competitive processes to establish a price baseline. The sole-source nature here inherently limits direct price comparison.

What are the potential risks associated with a sole-source award for critical defense tooling?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure, meaning taxpayers may pay more than necessary. Another risk is reduced innovation, as the contractor may have less incentive to develop cost-saving efficiencies or cutting-edge solutions when competition is absent. Furthermore, it creates a dependency on a single supplier for critical components or capabilities, which can be a vulnerability if that supplier faces financial difficulties, production issues, or changes its business strategy. Ensuring robust oversight and negotiation is crucial to mitigate these risks.

What is Lockheed Martin's track record with F-16 sustainment and modification programs?

Lockheed Martin Corporation, as the original manufacturer of the F-16, possesses an extensive and long-standing track record in the sustainment, modification, and upgrade of the F-16 Fighting Falcon. They have been involved in virtually all major F-16 programs, including upgrades, depot maintenance, and life extension initiatives, for decades. Their deep institutional knowledge, proprietary data, and established manufacturing and support infrastructure make them the incumbent and often the sole viable provider for highly specialized requirements like SLEP tooling. This history suggests a high level of technical capability and program execution experience.

What is the expected impact of this tooling on the F-16 Service Life Extension Program's timeline and effectiveness?

The provision of specialized tooling is critical for the successful and efficient execution of the F-16 Service Life Extension Program (SLEP). The tooling is designed to enable technicians to perform complex structural repairs, integrate new systems, and conduct necessary modifications safely and accurately. Having the right tooling can significantly shorten the time required for each aircraft undergoing the SLEP, reduce the risk of errors or damage during the process, and ensure that the extensions meet all performance and safety standards. Therefore, this $33.8 million investment in tooling is expected to directly enhance the program's effectiveness and potentially accelerate its overall completion timeline.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: FIRM FIXED PRICE (J)

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: $33,800,080

Exercised Options: $33,800,080

Current Obligation: $33,800,080

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline