DoD's $40.9M A/C 1099 Rebuild contract awarded to Lockheed Martin Corporation

Contract Overview

Contract Amount: $40,883,430 ($40.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-08-02

End Date: 2025-11-13

Contract Duration: 2,295 days

Daily Burn Rate: $17.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: A/C 1099 REBUILD

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $40.9 million to LOCKHEED MARTIN CORPORATION for work described as: A/C 1099 REBUILD Key points: 1. The contract value of $40.9 million represents a significant investment in aircraft sustainment. 2. Awarded as a sole-source contract, it bypasses competitive bidding processes. 3. The contract duration of 2295 days indicates a long-term commitment to this specific rebuild. 4. The 'Aircraft Manufacturing' NAICS code suggests a focus on complex, high-value production. 5. The cost-plus-fixed-fee pricing structure may lead to cost overruns if not closely managed. 6. The absence of small business set-asides suggests limited direct opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this specific A/C 1099 rebuild is challenging without detailed cost breakdowns and comparison to similar, publicly available rebuild contracts. The cost-plus-fixed-fee (CPFF) structure, while common for complex projects, carries inherent risk of cost escalation. The fixed fee component provides some predictability for the contractor's profit, but the overall cost to the government is variable. Without more granular data on the scope of work and the specific aircraft model, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically justified when only one responsible source is available or when urgent needs preclude a competitive process. The lack of competition means that the government did not benefit from potential price reductions or innovative solutions that might have emerged from a bidding process. This can limit price discovery and potentially lead to higher costs for the taxpayer.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no competitive pressure to drive down costs. This also limits transparency in pricing and the potential for innovation that competition often fosters.

Public Impact

The primary beneficiaries are the Department of the Air Force, ensuring the operational readiness of specific aircraft. The contract delivers critical aircraft sustainment and modernization services. The geographic impact is primarily centered in California, where the contractor is located. The contract supports specialized jobs within the aerospace manufacturing sector, particularly in aircraft rebuilding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost-plus-fixed-fee structure introduces risk of cost overruns.
Lack of small business participation may limit broader economic impact.

Positive Signals

Addresses a specific, likely critical, aircraft sustainment need for the Air Force.
Awarded to a major defense contractor with established capabilities.
Long contract duration suggests a well-defined, albeit lengthy, project.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. This contract falls within the defense sub-sector, focusing on the sustainment and rebuilding of existing aircraft platforms. Spending in this area is crucial for maintaining military readiness and extending the service life of expensive assets. Comparable spending benchmarks would typically involve other major aircraft overhaul and modernization programs, which often run into tens or hundreds of millions of dollars.

Small Business Impact

This contract does not appear to include a small business set-aside. The award to Lockheed Martin Corporation, a large prime contractor, suggests that subcontracting opportunities may exist for small businesses within the aerospace supply chain. However, the absence of a direct set-aside means that small businesses did not have a primary contractual role. The impact on the small business ecosystem will depend on the extent to which Lockheed Martin engages them as subcontractors for specialized components or services.

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 embedded in the contract's terms and conditions, including performance metrics and reporting requirements. Transparency is facilitated through contract award databases, though detailed cost breakdowns may be proprietary. The Inspector General of the Department of Defense would have jurisdiction to investigate potential fraud, waste, or abuse.

Related Government Programs

Aircraft Sustainment Programs
Defense Logistics Agency Contracts
Air Force Maintenance, Repair, and Overhaul (MRO)
Major Defense Acquisition Programs

Risk Flags

Sole-source award may indicate limited competition, potentially impacting price.
Cost-plus-fixed-fee structure carries inherent risk of cost escalation.
Contract duration is lengthy, requiring sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.9 million to LOCKHEED MARTIN CORPORATION. A/C 1099 REBUILD

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 $40.9 million.

What is the period of performance?

Start: 2019-08-02. End: 2025-11-13.

What is the specific aircraft model being rebuilt under the A/C 1099 REBUILD contract, and what is the scope of work involved?

The provided data does not specify the exact aircraft model designated as 'A/C 1099'. This designation likely refers to a specific type or series of aircraft within the Air Force inventory requiring significant structural or systems overhaul. The scope of work, given the 'Aircraft Manufacturing' NAICS code and the 'Cost Plus Fixed Fee' contract type, would typically involve extensive disassembly, repair or replacement of structural components, integration of updated avionics or systems, and rigorous testing to ensure airworthiness. The 'Rebuild' designation implies a comprehensive restoration rather than routine maintenance, aiming to extend the operational life of the aircraft by a substantial margin.

How does the $40.9 million contract value compare to historical spending on similar aircraft rebuild programs within the Department of Defense?

Without specific details on the aircraft model and the extent of the rebuild, a direct comparison of the $40.9 million value is difficult. However, major aircraft rebuild and modernization programs within the DoD often range from tens to hundreds of millions of dollars, depending on the complexity of the aircraft, the age of the platform, and the scope of upgrades. For instance, extensive structural refurbishment and avionics upgrades for legacy fighter jets or transport aircraft can easily exceed this figure. The value appears within a plausible range for a significant rebuild, but its 'value for money' depends heavily on the specific work performed and the expected service life extension achieved.

What are the key performance indicators (KPIs) and milestones associated with this contract, and how is Lockheed Martin's performance being monitored?

The provided data does not detail the specific Key Performance Indicators (KPIs) or milestones for this contract. However, for a Cost Plus Fixed Fee (CPFF) contract of this nature, performance monitoring typically involves tracking progress against a defined schedule, adherence to technical specifications, quality control of workmanship, and management of costs against the estimated total cost. The Air Force would assign program managers and contracting officers to oversee Lockheed Martin's performance, conduct regular reviews, and ensure compliance with contract terms. Milestones might include phases like aircraft induction, disassembly, component repair/replacement, reassembly, systems testing, and final acceptance flights.

Given the sole-source nature of this award, what justifications were provided by the Department of the Air Force for not pursuing a competitive bidding process?

The data indicates the contract was 'NOT COMPETED', implying a sole-source justification. Common reasons for sole-source awards include: (1) only one responsible source exists (e.g., unique technical expertise or proprietary technology); (2) urgent and compelling needs that preclude competition; or (3) specific circumstances where competition is not feasible or not in the government's best interest. For a specialized rebuild of a specific aircraft type, it's possible that Lockheed Martin, as the original manufacturer or a highly specialized MRO provider, was deemed the only entity capable of performing the work to the required standards within the necessary timeframe. The specific justification would be documented in the contract file.

What is Lockheed Martin Corporation's track record with similar aircraft sustainment and rebuild contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in aircraft manufacturing, sustainment, and modernization across various platforms for the DoD. They are the prime contractor for numerous aircraft programs, including fighters (like the F-35, F-16, F-22), transport aircraft, and specialized mission aircraft. Their track record typically involves large-scale, complex programs requiring significant engineering, manufacturing, and logistical support. While specific performance data for individual contracts isn't publicly detailed here, their long-standing relationship with the DoD and their position as a leading aerospace company suggest a substantial history of delivering such services, though like any large contractor, they may have faced performance challenges on specific projects.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) pricing structure in this contract, and how are they mitigated?

The primary risk of a CPFF contract is that the government bears the cost of all allowable expenses, potentially leading to cost overruns if the contractor's actual costs exceed the initial estimate. The 'fixed fee' provides the contractor a predetermined profit margin regardless of the final cost. Mitigation strategies employed by the government include robust cost accounting standards, detailed audits of contractor expenditures, stringent oversight by contracting officers, and clear definition of allowable costs. The Air Force would closely monitor expenditures and require detailed justification for costs incurred to ensure they are reasonable, allocable, and necessary for contract performance, thereby controlling potential overruns.

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

Solicitation ID: FA852819R0014

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: $40,883,430

Exercised Options: $40,883,430

Current Obligation: $40,883,430

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $32,785

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