DoD's $29.9M U-2 Programmed Depot Maintenance Contract Awarded to Lockheed Martin

Contract Overview

Contract Amount: $29,922,759 ($29.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2011-03-16

Contract Duration: 1,262 days

Daily Burn Rate: $23.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: U-2S PROGRAMMED DEPOT MAINTENANCE

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $29.9 million to LOCKHEED MARTIN CORPORATION for work described as: U-2S PROGRAMMED DEPOT MAINTENANCE Key points: 1. Contract awarded to incumbent for specialized aircraft maintenance. 2. Limited competition due to unique technical requirements. 3. Firm Fixed Price contract type aims to control costs. 4. Contract duration of over three years suggests a significant maintenance undertaking. 5. Focus on programmed depot maintenance indicates a need for extensive, scheduled upkeep. 6. No small business set-aside, potentially limiting broader industry participation.

Value Assessment

Rating: fair

The contract value of $29.9 million for programmed depot maintenance of U-2 aircraft appears to be within a reasonable range for specialized aerospace services. However, without specific benchmarks for U-2 depot maintenance or comparable contracts for similar high-tech aircraft, a definitive value-for-money assessment is challenging. The firm fixed-price structure is a positive indicator for cost control, but the lack of competition could lead to less favorable pricing than in a more open market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This is often the case for highly specialized maintenance requiring unique technical expertise, proprietary knowledge, or specific tooling possessed by the original manufacturer or a designated service provider. The lack of competition means that the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the most economical price is achieved.

Public Impact

The U-2 aircraft fleet benefits from essential maintenance to ensure operational readiness. This contract supports the continued intelligence, surveillance, and reconnaissance (ISR) capabilities of the U.S. Air Force. Maintenance activities are likely concentrated at a specialized facility, potentially impacting the local workforce at that site. The longevity of the U-2 program means this maintenance is critical for sustaining an aging but vital asset.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Sole-source award limits opportunities for other qualified maintenance providers.
Reliance on a single contractor for critical maintenance poses a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract type provides cost certainty.
Award to Lockheed Martin, the original manufacturer, suggests access to specialized expertise and parts.
Programmed depot maintenance indicates a structured and planned approach to upkeep, potentially reducing unexpected failures.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and a reliance on specialized technical expertise. Programmed depot maintenance for complex aircraft like the U-2 falls within this specialized niche. The market for such services is often dominated by original equipment manufacturers (OEMs) or a few highly qualified contractors due to the stringent requirements and security protocols involved. Spending in this area is driven by the need to maintain the operational readiness of critical military assets.

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 sole-source nature of the award. The specialized nature of U-2 depot maintenance typically requires extensive facilities, certifications, and historical knowledge that are often held by larger, established aerospace companies.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is generally maintained through contract databases, but detailed performance metrics and cost breakdowns may not always be publicly available.

Related Government Programs

U-2 Aircraft Sustainment
Air Force ISR Platforms
Defense Depot Maintenance Programs
Aerospace Manufacturing and Maintenance Services

Risk Flags

Sole-source award limits competition
Potential for cost overruns in sole-source contracts
Reliance on a single contractor for critical maintenance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.9 million to LOCKHEED MARTIN CORPORATION. U-2S PROGRAMMED DEPOT MAINTENANCE

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $29.9 million.

What is the period of performance?

Start: 2007-10-01. End: 2011-03-16.

What is Lockheed Martin's track record with U-2 maintenance contracts?

Lockheed Martin, as the original manufacturer of the U-2 aircraft, has a long-standing and inherent track record with its maintenance and sustainment. They possess the original design specifications, technical data, and specialized tooling required for the U-2's complex systems. Historically, contracts for the maintenance and sustainment of unique military platforms like the U-2 are often awarded to the OEM due to the deep institutional knowledge and proprietary information they hold. While specific performance metrics for this particular $29.9 million contract (2007-2011) are not detailed in the provided data, Lockheed Martin's role as the primary contractor for the U-2 program suggests a continuity of service and expertise in maintaining the aircraft's operational readiness throughout its service life.

How does the $29.9 million value compare to similar programmed depot maintenance contracts for high-altitude reconnaissance aircraft?

Comparing the $29.9 million value for U-2 programmed depot maintenance (PDM) requires context regarding the scope and duration of the work. This contract, awarded from 2007 to 2011, spanned approximately 40 months. PDM for complex military aircraft is a significant undertaking, involving extensive inspections, repairs, overhauls, and system upgrades. While specific public data on PDM costs for comparable aircraft like the Global Hawk (unmanned) or potentially older manned reconnaissance platforms is scarce, the cost per year for this U-2 contract averages around $9 million. This figure needs to be evaluated against the complexity of the U-2's systems, its age, and the specialized labor and facilities required. Without direct, publicly available benchmarks for similar manned reconnaissance PDM contracts, it's difficult to definitively state if $29.9 million represents a high, low, or average cost, but it reflects a substantial investment in maintaining a critical, albeit aging, asset.

What are the primary risks associated with a sole-source award for critical aircraft maintenance?

The primary risk associated with a sole-source award for critical aircraft maintenance, such as the U-2 programmed depot maintenance contract awarded to Lockheed Martin, is the potential for inflated costs due to the absence of competition. Without competing bids, the government may not achieve the most economically advantageous price. Another significant risk is contractor performance; if the sole-source provider experiences performance issues, delays, or quality control problems, the government has limited immediate alternatives for rectification without potentially renegotiating or initiating a lengthy sole-source justification process. Furthermore, reliance on a single entity can create a dependency that might hinder the development of alternative maintenance capabilities within the broader defense industrial base, potentially impacting long-term strategic options and resilience.

How effective is the Firm Fixed Price (FFP) contract type in managing costs for programmed depot maintenance?

The Firm Fixed Price (FFP) contract type is generally considered effective in managing costs for programmed depot maintenance (PDM) because it shifts the majority of the cost risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to manage their resources efficiently, control overhead, and minimize waste to maximize their profit margin. For PDM, where the scope of work can be defined with reasonable certainty (e.g., scheduled inspections, known repair procedures), FFP provides cost predictability for the government. However, if unforeseen technical issues arise that significantly deviate from the anticipated scope, the contractor may seek contract modifications, potentially increasing the overall cost, though the initial price remains fixed.

What are the historical spending patterns for U-2 programmed depot maintenance?

Historical spending patterns for U-2 programmed depot maintenance (PDM) indicate a consistent need for sustainment of this long-serving intelligence, surveillance, and reconnaissance (ISR) platform. The provided data shows a $29.9 million contract awarded to Lockheed Martin from October 2007 to March 2011. This represents an average annual expenditure of approximately $7.5 million over its duration. While this single data point doesn't reveal long-term trends, it aligns with the expectation that aging aircraft fleets require ongoing, significant investment in maintenance to remain operational. Such spending is typically budgeted annually by the Department of Defense, reflecting the cyclical nature of major maintenance events and the overall operational tempo of the U-2 fleet. Detailed historical data across multiple contract vehicles and fiscal years would be needed to fully map spending patterns and identify any significant fluctuations or shifts in maintenance strategy.

What are the implications of this contract being awarded in California (CA) for the U-2 program?

The contract data indicates the award is associated with California (SN: CALIFORNIA), which is significant given Lockheed Martin's substantial presence in the state, particularly in aerospace manufacturing and defense contracting. Many of Lockheed Martin's major aerospace facilities are located in California, including those involved in aircraft production and sustainment. Therefore, this contract likely supported maintenance operations at one of their California-based facilities, potentially leveraging existing infrastructure, specialized workforce, and supply chains within the region. The geographic concentration of such critical maintenance activities can have implications for regional economic impact, job creation in the aerospace sector, and the logistical coordination required for the U-2 program's operational readiness, ensuring that maintenance is performed where the necessary expertise and resources are readily available.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1011 LOCKHEED WAY, PALMDALE, CA, 27

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,922,759

Exercised Options: $29,922,759

Current Obligation: $29,922,759

Contract Characteristics

Cost or Pricing Data: NO

Timeline