DoD awards $179M U-2 Support Contract to Lockheed Martin, extending to 2025
Contract Overview
Contract Amount: $179,247,692 ($179.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-04-01
End Date: 2025-03-31
Contract Duration: 2,191 days
Daily Burn Rate: $81.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY19 U-2 SUPPORT AND SUSTAINMENT ORDER
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599
Plain-Language Summary
Department of Defense obligated $179.2 million to LOCKHEED MARTIN CORPORATION for work described as: FY19 U-2 SUPPORT AND SUSTAINMENT ORDER Key points: 1. Significant contract value for specialized aircraft sustainment. 2. Sole-source award to incumbent prime contractor raises competition concerns. 3. Long-term nature of the contract warrants close performance monitoring. 4. Focus on a niche defense sector with limited alternative providers.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Benchmarking against similar specialized aircraft sustainment contracts is difficult due to the U-2's unique operational profile.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially increases costs for taxpayers compared to a competitive environment.
Taxpayer Impact: The lack of competition may result in higher costs for taxpayers over the contract's duration.
Public Impact
Ensures continued operational readiness of critical U-2 reconnaissance aircraft. Supports high-tech aerospace jobs within Lockheed Martin. Potential for cost inefficiencies due to sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Ensures critical asset sustainment
- Incumbent expertise
Sector Analysis
This contract falls within the Defense sector, specifically supporting legacy aircraft sustainment. Spending benchmarks for such specialized, long-duration support contracts are highly variable and depend on the unique requirements of the platform.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for oversight. Given the sole-source and cost-plus nature, robust oversight is crucial to ensure fair pricing and effective performance.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type increases cost risk.
- Long duration (2019-2025) may not adapt to changing needs.
- Lack of transparency on specific sustainment tasks.
- Potential for contractor inefficiencies.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $179.2 million to LOCKHEED MARTIN CORPORATION. FY19 U-2 SUPPORT AND SUSTAINMENT ORDER
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 $179.2 million.
What is the period of performance?
Start: 2019-04-01. End: 2025-03-31.
What is the projected cost growth potential under this CPFF contract, and what mechanisms are in place to control it?
The Cost Plus Fixed Fee (CPFF) structure inherently carries risk of cost growth if the fixed fee does not adequately account for unforeseen expenses. The contracting officer and DCMA must implement stringent oversight, regular performance reviews, and potentially incentive structures to mitigate cost overruns and ensure the government only pays for necessary and reasonable costs.
Are there any plans or considerations for future competition for U-2 sustainment services?
Given the sole-source nature of this award, it suggests a lack of viable alternatives or a strategic decision to maintain continuity with the incumbent. Future competition would likely depend on evolving defense strategies, potential new entrants with relevant capabilities, or a shift in the U-2's operational lifecycle and sustainment needs.
How does the $179M award compare to historical spending on U-2 sustainment, and does it reflect current operational tempo?
Without historical spending data for U-2 sustainment, a direct comparison is difficult. However, the substantial value suggests significant ongoing support requirements. The contract duration and value should align with the projected operational tempo and planned retirement of the U-2 fleet to ensure efficient use of taxpayer funds.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1011 LOCKHEED WAY, PALMDALE, CA, 93599
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: $203,408,203
Exercised Options: $203,408,203
Current Obligation: $179,247,692
Actual Outlays: $10,175,216
Subaward Activity
Number of Subawards: 75
Total Subaward Amount: $13,725,565
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA852819D0015
IDV Type: IDC
Timeline
Start Date: 2019-04-01
Current End Date: 2025-03-31
Potential End Date: 2025-03-31 00:00:00
Last Modified: 2025-09-12
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