DoD's $29M F-16 Engineering Services contract awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $29,181,342 ($29.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-03-30

End Date: 2023-03-01

Contract Duration: 336 days

Daily Burn Rate: $86.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: Defense

Official Description: F-16 ENGINEERING SERVCIES FOR THE ON-SITE FOSTR PROGRAM

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $29.2 million to LOCKHEED MARTIN CORPORATION for work described as: F-16 ENGINEERING SERVCIES FOR THE ON-SITE FOSTR PROGRAM Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The fixed-price-level-of-effort contract type may not fully incentivize efficiency. 3. High value contract for specialized engineering services suggests critical support for F-16 fleet. 4. Performance period of 336 days indicates a focused, short-term support requirement. 5. Awarded to incumbent contractor, potentially leveraging existing expertise but raising questions about competition. 6. No small business set-aside, suggesting the prime contractor is expected to perform all work.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized engineering focus. Without competitive bids, it's difficult to ascertain if the $29.18 million represents a fair market price. The fixed-price-level-of-effort structure means the government pays for the effort expended, which can lead to cost overruns if not carefully managed and monitored. Comparing this to similar sole-source engineering support contracts for major defense platforms would be necessary for a more robust value 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 justified when only one responsible source is available or when there's a compelling urgency. The lack of competition means there was no opportunity for other qualified contractors to bid, which can limit price negotiation and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government had less leverage to negotiate the lowest possible price for these critical engineering services.

Public Impact

The U.S. Air Force benefits from continued engineering support for the F-16 fighter jet program. Specialized technical expertise is provided to ensure the operational readiness and sustainment of the F-16 fleet. The contract supports high-skilled engineering jobs, likely within Lockheed Martin's existing workforce. Geographic impact is concentrated where Lockheed Martin performs the engineering services, likely at their facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Fixed-price-level-of-effort contract type may not incentivize maximum cost efficiency.
Lack of transparency in the justification for sole-source award.
Potential for cost creep if effort is not closely monitored.

Positive Signals

Award to incumbent contractor likely ensures continuity of essential services.
Leverages existing specialized knowledge of the F-16 platform.
Contract addresses critical engineering needs for a key defense asset.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for a major military aircraft platform. The market for such specialized support is dominated by original equipment manufacturers like Lockheed Martin, who possess unique design and sustainment knowledge. Spending on aircraft sustainment and engineering services represents a significant portion of the Department of Defense's budget, aimed at maintaining the readiness of its vast fleet.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the prime contractor, Lockheed Martin, is expected to perform the majority, if not all, of the engineering services. Consequently, there is no direct positive impact on the small business ecosystem through this specific award, nor are there subcontracting opportunities generated for them.

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 the terms of the fixed-price-level-of-effort agreement, focusing on the delivery of specified engineering services within the agreed-upon effort. Transparency is limited due to the sole-source nature of the award, with justifications for this approach typically being internal to the agency. 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

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of transparency in the justification for not competing the award.
Fixed-price-level-of-effort contract type requires diligent government oversight to manage costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.2 million to LOCKHEED MARTIN CORPORATION. F-16 ENGINEERING SERVCIES FOR THE ON-SITE FOSTR PROGRAM

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 $29.2 million.

What is the period of performance?

Start: 2022-03-30. End: 2023-03-01.

What is the historical spending pattern for F-16 engineering services provided by Lockheed Martin?

Analyzing historical spending for F-16 engineering services from Lockheed Martin requires access to detailed contract databases. However, it's common for the original equipment manufacturer (OEM) to receive sole-source or limited-competition contracts for specialized engineering support throughout an aircraft's lifecycle. This is often due to proprietary knowledge, design control, and unique tooling. Over the years, the F-16 program has undergone numerous upgrades and sustainment efforts, likely involving significant engineering service expenditures. Without specific historical data for this exact 'FOSTR PROGRAM' designation, a precise trend is hard to establish, but consistent, high-value contracts for engineering support are typical for mature platforms like the F-16, especially when facing modernization or extended service life requirements.

How does the pricing of this contract compare to similar sole-source engineering support contracts for other major defense platforms?

Direct price comparison is difficult without knowing the specific scope of work, labor categories, and duration of similar contracts. However, sole-source contracts inherently lack the price discovery mechanism of competition. For major defense platforms, engineering support from the OEM can range from tens to hundreds of millions of dollars annually, depending on the platform's complexity, age, and operational tempo. The $29.18 million for approximately one year of effort on the F-16 is substantial, but its 'fairness' can only be assessed against contracts with identical or highly comparable service requirements and market conditions. The absence of competition means the government relies heavily on its own cost estimation capabilities and negotiation skills, which can be challenging for highly specialized technical services.

What are the primary risks associated with a sole-source award for critical engineering services?

The primary risks associated with a sole-source award for critical engineering services include inflated pricing due to the lack of competitive pressure, potential for reduced innovation, and a diminished incentive for the contractor to control costs efficiently. The government may overpay because there are no competing offers to benchmark against. Furthermore, relying on a single source can create vendor lock-in and reduce flexibility if the contractor's performance or strategic direction changes. There's also a risk that the justification for sole-sourcing might not be as robust as initially presented, potentially masking opportunities for broader competition that could have yielded better value.

What is the expected program effectiveness or outcome of these engineering services for the F-16?

The expected outcome of these engineering services is the continued sustainment and operational readiness of the F-16 fighter jet fleet. This includes addressing technical challenges, implementing necessary modifications or upgrades, providing troubleshooting support, and ensuring the aircraft meet performance and safety standards. Effective engineering support is crucial for maintaining the combat capability of the Air Force's F-16s, which remain a significant part of its tactical air power. The 'FOSTR PROGRAM' designation suggests a focus on sustainment or a specific upgrade/modernization effort, aiming to extend the operational life or enhance the capabilities of the aircraft.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract?

While the provided data does not explicitly list performance metrics or KPIs, contracts of this nature typically include them within the contract's Statement of Work (SOW) or Performance Work Statement (PWS). For engineering services, KPIs might include metrics related to response time for technical queries, successful resolution of engineering issues, timely delivery of technical data or reports, adherence to project schedules, and potentially quality metrics related to the accuracy and completeness of engineering analyses. The fixed-price-level-of-effort structure implies that the government is paying for the effort expended to achieve certain technical objectives, and performance would be evaluated against the successful completion of those objectives and adherence to the defined effort.

What is the justification provided for awarding this contract on a sole-source basis?

The provided data indicates the contract type is 'NOT COMPETED,' which typically implies a sole-source award. The specific justification for this sole-source award is not detailed in the summary data. However, common justifications under Federal Acquisition Regulation (FAR) Part 6 include: (1) only one responsible source and no other supplies or services will satisfy agency requirements (FAR 6.302-1), (2) the agency is following an industrial mobilization requirement or engineering/research-development capability (FAR 6.302-2), (3) statutory authorization (FAR 6.302-3), or (4) international agreement (FAR 6.302-4). For a contractor like Lockheed Martin providing engineering services on a platform they manufactured, the justification often centers on the unique technical knowledge, proprietary data, and specialized facilities required, making them the only responsible source.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

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 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: $67,664,636

Exercised Options: $29,181,342

Current Obligation: $29,181,342

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA823222D0004

IDV Type: IDC

Timeline