DoD Awards $182.5M to Lockheed Martin for F-16 Upgrade, Lacking Competition
Contract Overview
Contract Amount: $182,546,065 ($182.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-10-31
End Date: 2032-09-30
Contract Duration: 3,257 days
Daily Burn Rate: $56.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CHILE F-16 M6.6 UPGRADE
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $182.5 million to LOCKHEED MARTIN CORPORATION for work described as: CHILE F-16 M6.6 UPGRADE Key points: 1. Significant investment in advanced fighter jet capabilities. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long-term contract duration (2023-2032) impacts budget predictability. 4. Engineering services for aircraft modification are critical for national defense.
Value Assessment
Rating: questionable
The contract value of $182.5 million for F-16 upgrades is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous upgrade contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition for this significant defense contract means taxpayers may be paying a premium for the F-16 upgrades.
Public Impact
Enhances the combat effectiveness of the F-16 fleet. Supports advanced avionics and weapon system integration. Contributes to maintaining air superiority. Potential for job creation within Lockheed Martin and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Modernization of critical defense assets
- Potential for technological advancement
Sector Analysis
This contract falls under engineering services for defense, a sector characterized by high specialization and often significant government investment. Benchmarks for similar sole-source aircraft upgrade contracts would be necessary for a more precise comparison.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this sole-source contract. Further investigation would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government is receiving the best possible value and that competition was appropriately waived.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Long-term dependency on a single supplier
- Limited transparency in pricing
- Risk of technological obsolescence if not managed proactively
Tags
engineering-services, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $182.5 million to LOCKHEED MARTIN CORPORATION. CHILE F-16 M6.6 UPGRADE
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 $182.5 million.
What is the period of performance?
Start: 2023-10-31. End: 2032-09-30.
What specific technical advancements justify the sole-source award and the $182.5 million price tag for the F-16 upgrades?
The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or essential integration requirements that only the incumbent contractor can provide. For the F-16 upgrades, this could involve highly specialized avionics, software, or structural modifications that are integral to the aircraft's existing systems and performance. The $182.5 million cost would need to be broken down to show how it aligns with research, development, manufacturing, and integration of these advanced features, ensuring they meet stringent defense requirements.
What are the long-term risks associated with a sole-source contract for critical defense system upgrades like the F-16 program?
Sole-source contracts for critical defense systems carry risks such as inflated costs due to the lack of competitive pressure, potential for vendor lock-in where the government becomes overly reliant on a single provider, and reduced innovation as there's less incentive for the contractor to explore cost-saving or performance-enhancing alternatives. Over time, this can lead to higher lifecycle costs and a diminished ability to adapt to evolving threats or technological advancements if the sole provider's roadmap doesn't align with future needs.
How will the effectiveness of these F-16 upgrades be measured, especially given the absence of a competitive baseline?
Effectiveness will be measured through predefined performance metrics and key performance parameters (KPPs) outlined in the contract. These typically include improvements in radar range, electronic warfare capabilities, data processing speed, survivability, and weapon system accuracy. The Department of the Air Force will likely conduct rigorous testing and evaluation post-upgrade, comparing performance against the original specifications and potentially against simulated or benchmarked capabilities of similar upgraded platforms, even without a direct competitor's bid.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA823222R3009
Offers Received: 1
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $182,546,065
Exercised Options: $182,546,065
Current Obligation: $182,546,065
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-10-31
Current End Date: 2032-09-30
Potential End Date: 2032-09-30 00:00:00
Last Modified: 2026-02-17
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- THE Purpose of This Contract IS to Award Long Lead Funding for F-35A, F-35B, and F-35C Aircraft for U.S. Services, Non-Dod Partners, and FMS Customers — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)