Lockheed Martin Corp. awarded $42M contract for aircraft manufacturing by the Air Force

Contract Overview

Contract Amount: $42,030,750 ($42.0M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2025-06-01

End Date: 2026-05-31

Contract Duration: 364 days

Daily Burn Rate: $115.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CLS UCA

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $42.0 million to LOCKHEED MARTIN CORP for work described as: CLS UCA Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. Duration of 364 days suggests a focused scope, but potential for follow-on work exists. 4. The specific North American Industry Classification System (NAICS) code 336411 indicates a focus on aircraft manufacturing. 5. Awarded by the Department of the Air Force, indicating a need for specialized aviation capabilities. 6. The contract is a definitive contract, suggesting a clear agreement on terms and conditions.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the pricing for this specific aircraft manufacturing requirement. The cost-plus-fixed-fee structure necessitates close oversight to ensure costs remain reasonable and do not escalate beyond initial projections. Comparing this to similar sole-source or non-competed contracts within the Department of Defense for aircraft components or manufacturing services would be necessary for a more robust value assessment. The fixed fee component provides some cost control, but the variable cost component requires diligent management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential bidders. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency dictates a direct award. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding environment.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive pressure. This could result in a higher overall cost for the aircraft manufacturing services provided.

Public Impact

The primary beneficiary of this contract is the Department of the Air Force, which will receive aircraft manufacturing services. The services delivered will support the Air Force's operational readiness and strategic objectives. The contract is geographically focused on Georgia (GA), indicating potential local economic impact and workforce utilization in that state. The contract may indirectly support a specialized manufacturing workforce within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contracts require robust oversight to prevent cost overruns.
Sole-source awards can create dependency on a single contractor, reducing future flexibility.
The specific nature of aircraft manufacturing can involve complex supply chains and potential delays.

Positive Signals

Award to a known entity, Lockheed Martin Corp., suggests a potentially reliable contractor with established expertise.
Definitive contract structure implies a clear understanding of scope and deliverables.
Fixed fee component provides a degree of cost certainty for the contractor's effort.
Contract duration of one year allows for focused execution and potential for future adjustments.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high barriers to entry, significant research and development costs, and long product lifecycles. Aircraft manufacturing, specifically, is a highly specialized field dominated by a few large prime contractors. This contract falls within the broader defense industrial base, where government spending is a primary driver of demand. Comparable spending benchmarks would involve analyzing other sole-source or competed contracts for similar aircraft components or manufacturing services within the Department of Defense.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the nature of aircraft manufacturing and the prime contractor being Lockheed Martin Corp., it is unlikely that small businesses would be directly awarded this prime contract. However, Lockheed Martin may engage small businesses as subcontractors, which would be a positive outcome for the small business ecosystem if such opportunities are pursued.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures would be embedded within the contract's terms and conditions, including performance metrics and reporting requirements. Transparency may be limited due to the sole-source nature of the award, but contract award data is publicly available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Aerospace Industry Contracts
Department of Defense Contracts
Air Force Aviation Programs

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing structure
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.0 million to LOCKHEED MARTIN CORP. CLS UCA

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

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 $42.0 million.

What is the period of performance?

Start: 2025-06-01. End: 2026-05-31.

What is Lockheed Martin Corp.'s track record with the Department of the Air Force for similar aircraft manufacturing contracts?

Lockheed Martin Corporation is a major defense contractor with a long history of supplying aircraft and related services to the Department of the Air Force. They are known for producing various fighter jets, transport aircraft, and other aerospace systems. Analyzing their past performance on similar cost-plus-fixed-fee contracts, particularly those awarded on a sole-source basis, would reveal their ability to manage costs effectively and meet delivery schedules. Historical data on contract modifications, overruns, and successful program completions would provide valuable context for assessing their reliability on this specific award. Their extensive experience suggests a high likelihood of meeting the technical requirements, but cost control remains a key area for scrutiny.

How does the $42 million award compare to typical spending on aircraft manufacturing by the Air Force?

The $42 million award represents a moderate investment for a specific aircraft manufacturing task within the Department of the Air Force. The Air Force's annual budget for aircraft procurement and sustainment runs into billions of dollars, encompassing a wide range of aircraft types and complexity. This particular contract's value should be assessed in the context of its specific scope: is it for a new component, a modification, a limited production run, or a specific phase of development? Without more detail on the exact nature of the 'aircraft manufacturing' services, direct comparison to overall Air Force spending is difficult. However, it is a significant sum that warrants careful management and oversight to ensure value.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for aircraft manufacturing?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for aircraft manufacturing are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in a competitive environment. The government relies on the contractor's good faith in pricing and efficiency. Secondly, the CPFF structure, while providing flexibility, carries the risk of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee, meaning that if costs increase, the government pays more, while the contractor's profit margin (the fixed fee) remains constant. Effective oversight is crucial to monitor costs, ensure efficiency, and prevent scope creep that could inflate expenses.

What is the expected program effectiveness and impact of this contract?

The expected program effectiveness hinges on the successful delivery of the specified aircraft manufacturing services by Lockheed Martin Corp. If the contract fulfills its intended purpose, it will contribute to the Air Force's operational capabilities, potentially by providing essential components, modifying existing platforms, or supporting new aircraft development. The impact is primarily on the Air Force's mission readiness and technological advancement. The geographic focus on Georgia suggests a localized economic impact through job creation and utilization of regional supply chains. The long-term effectiveness will also depend on the reliability and performance of the manufactured product in operational use.

How does this contract's value and structure compare to historical spending patterns for aircraft manufacturing within the Air Force?

Historical spending patterns for aircraft manufacturing within the Air Force reveal a consistent and substantial investment in acquiring and maintaining aerial assets. This often involves large-scale, multi-year contracts, frequently competed, but also includes sole-source awards for specialized systems or upgrades where only one or a few contractors possess the necessary expertise. The $42 million value of this specific contract is relatively modest compared to the cost of entire aircraft programs but could represent a significant portion of a specific component's manufacturing or a specialized modification. The prevalence of CPFF contracts in complex defense manufacturing, especially for R&D or unique production runs, is also a historical trend, underscoring the importance of robust oversight mechanisms.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA852525RB005

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 86 S COBB DR SE, MARIETTA, GA, 30063

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: $56,041,000

Exercised Options: $56,041,000

Current Obligation: $42,030,750

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline