DoD's $20.3M F-16 ASIP contract awarded to Lockheed Martin for engineering services

Contract Overview

Contract Amount: $20,307,189 ($20.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-03-01

End Date: 2021-02-28

Contract Duration: 364 days

Daily Burn Rate: $55.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-16 AIRCRAFT STRUCTURAL INTEGRITY PROGRAM (ASIP)

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $20.3 million to LOCKHEED MARTIN CORPORATION for work described as: F-16 AIRCRAFT STRUCTURAL INTEGRITY PROGRAM (ASIP) Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing. 2. Engineering services are critical for maintaining the structural integrity of F-16 aircraft. 3. The contract duration of one year suggests a focused scope of work. 4. Performance is in Texas, a key hub for aerospace and defense activities. 5. The firm-fixed-price structure shifts some risk to the contractor. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to its sole-source nature and specialized engineering services. The contract value of $20.3 million for a one-year duration for F-16 structural integrity program support appears reasonable for highly specialized technical services. However, without competitive bids, it's difficult to definitively assess if it represents the best possible value for taxpayers. Comparisons to similar sole-source engineering contracts for major defense platforms would be necessary for a more robust assessment.

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 when urgency precludes a full and open competition. The lack of competition means that price discovery through market forces was not leveraged, potentially leading to higher costs than if multiple firms had bid.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically seen in competitive bidding environments.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-16 fighter jet fleet, ensuring operational readiness. Services delivered include critical engineering support for structural integrity, directly impacting aircraft safety and longevity. The geographic impact is centered in Texas, supporting specialized engineering jobs within the state. Workforce implications include the employment of highly skilled engineers and technical personnel at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns without competitive pressure.

Positive Signals

Contract awarded to incumbent contractor with established expertise on F-16.
Firm-fixed-price contract provides cost certainty for the government.
Engineering services are essential for maintaining critical defense assets.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Engineering services, particularly for legacy aircraft like the F-16, are crucial for maintaining fleet readiness and extending operational life. This contract fits within the broader defense engineering services market, which is often dominated by large prime contractors due to the specialized knowledge and security clearances required. Comparable spending benchmarks for similar sustainment engineering contracts on major weapon systems would be in the tens to hundreds of millions annually.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the information provided. The award to a large prime contractor like Lockheed Martin suggests that the primary focus is on specialized, high-level engineering expertise, which may not be readily available from smaller firms in this specific context.

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 include performance reviews, adherence to contract terms, and delivery of required engineering reports. Transparency is limited due to the sole-source nature of the award, with the justification for this procurement method being a key area for scrutiny. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

F-16 Sustainment Programs
Aerospace Engineering Services
Department of Defense Aircraft Maintenance Contracts
Lockheed Martin Defense Contracts
Air Force Readiness and Sustainment

Risk Flags

Sole-source award lacks competitive justification.
Potential for cost escalation without competitive pressure.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.3 million to LOCKHEED MARTIN CORPORATION. F-16 AIRCRAFT STRUCTURAL INTEGRITY PROGRAM (ASIP)

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 $20.3 million.

What is the period of performance?

Start: 2020-03-01. End: 2021-02-28.

What is the specific justification provided by the Department of the Air Force for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The specific justification for a sole-source award typically centers on the unique capabilities of the contractor, the proprietary nature of the technology or data, or the urgency of the requirement that precludes a competitive process. For Lockheed Martin and the F-16, it's highly probable that the justification relates to their deep, historical knowledge of the F-16's design, manufacturing, and maintenance history, including proprietary technical data and specialized tooling. The Structural Integrity Program (ASIP) requires intimate familiarity with the aircraft's design and potential failure points, which Lockheed Martin, as the original equipment manufacturer, possesses. The Air Force would need to document that no other source can meet these specific requirements within the necessary timeframe and to the required standard.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this specialized engineering services context?

A firm-fixed-price contract is generally advantageous for the government as it establishes a ceiling on the total cost of the contract. In this context, for engineering services related to the F-16 ASIP, the FFP structure shifts the risk of cost overruns to the contractor, Lockheed Martin. This means that if the contractor incurs higher-than-expected costs to perform the required engineering analysis, design modifications, or testing, they are responsible for absorbing those additional expenses, provided the scope of work remains unchanged. This provides greater cost certainty for the Department of the Air Force and incentivizes the contractor to manage its resources efficiently to maintain profitability.

What are the potential long-term implications of relying on sole-source contracts for critical aircraft sustainment programs like the F-16 ASIP?

The long-term implications of relying on sole-source contracts for critical sustainment programs can include reduced competition, potentially higher costs over the life of the program, and a diminished incentive for innovation from alternative providers. While sole-source awards to the original equipment manufacturer (OEM) like Lockheed Martin for the F-16 ASIP ensure continuity and leverage deep expertise, they can also create a dependency. Over time, this can lead to a lack of market pressure to drive down prices or explore alternative, potentially more cost-effective, engineering solutions. It also limits opportunities for other highly capable firms to develop expertise and compete for future sustainment contracts, potentially impacting the broader defense industrial base.

Can the $20.3 million contract value be benchmarked against historical spending for the F-16 ASIP or similar structural integrity programs?

Benchmarking the $20.3 million contract value requires access to historical spending data for the F-16 ASIP and comparable structural integrity programs on other aircraft platforms. Without specific historical data, a direct comparison is difficult. However, the value represents approximately 1.5% of the total contract value if it were to be continuously funded at this rate for a decade. Given that the F-16 is a mature platform, annual spending on its structural integrity program could fluctuate based on the intensity of inspections, required repairs, or upgrades. A more thorough analysis would involve examining multi-year spending trends for the F-16 ASIP and comparing the per-aircraft or per-flight-hour cost of structural integrity maintenance against similar programs for aircraft like the F-15, F-18, or F-35.

What performance metrics or key performance indicators (KPIs) are likely being used to evaluate Lockheed Martin's performance under this contract?

For a contract focused on aircraft structural integrity, key performance indicators (KPIs) would likely revolve around the timely and accurate completion of structural inspections, analysis of findings, and the development of recommended repair or modification solutions. Specific metrics could include the percentage of scheduled inspections completed on time, the accuracy of structural assessments, the turnaround time for engineering analysis reports, and the effectiveness of proposed solutions in addressing identified structural issues. Adherence to safety standards and the successful implementation of any required structural modifications without compromising aircraft availability would also be critical performance indicators. The government would monitor these KPIs to ensure the F-16 fleet's structural integrity is maintained to operational standards.

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: 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: $20,307,189

Exercised Options: $20,307,189

Current Obligation: $20,307,189

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