DoD's $117M U-2 Avionics Tech Refresh Awarded to Lockheed Martin Amidst Limited Competition
Contract Overview
Contract Amount: $117,438,709 ($117.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-03-04
End Date: 2025-02-28
Contract Duration: 1,822 days
Daily Burn Rate: $64.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: U-2 AVIONICS TECH REFRESH
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599
Plain-Language Summary
Department of Defense obligated $117.4 million to LOCKHEED MARTIN CORPORATION for work described as: U-2 AVIONICS TECH REFRESH Key points: 1. The contract value is substantial at $117.4 million. 2. Lockheed Martin is the sole awardee, raising questions about competition. 3. The 'Aircraft Manufacturing' sector is highly specialized. 4. Potential risks include vendor lock-in and lack of price discovery.
Value Assessment
Rating: questionable
The contract is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking is difficult without more specific cost breakdowns, but the total value for an avionics refresh on a legacy platform warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for this avionics upgrade, as the government did not explore potentially lower-cost alternatives.
Public Impact
Modernization of critical intelligence, surveillance, and reconnaissance (ISR) capabilities. Ensuring the continued operational effectiveness of the U-2 fleet. Potential for extended service life of a key military asset. Impact on the aerospace and defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost-plus contract type can incentivize higher spending.
- Legacy platform refresh may have unforeseen technical challenges.
Positive Signals
- Maintains critical ISR capabilities.
- Supports a key defense asset.
- Leverages existing platform knowledge.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for avionics upgrades on a legacy platform. Spending in this area is driven by the need to maintain technological superiority and extend the life of existing assets, often involving high R&D and specialized manufacturing costs.
Small Business Impact
The awardee is Lockheed Martin Corporation, a large defense contractor. There is no indication that small businesses were involved in this specific contract, which is common for sole-source, high-value sole-source awards in specialized aerospace manufacturing.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Air Force to ensure costs are reasonable and the work is performed efficiently. Contract performance monitoring will be crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding.
- Potential for cost overruns due to CPFF structure.
- Dependence on a single contractor for critical upgrades.
- Aging platform may present integration challenges.
- Limited transparency on pricing due to sole-source nature.
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 $117.4 million to LOCKHEED MARTIN CORPORATION. U-2 AVIONICS TECH REFRESH
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 $117.4 million.
What is the period of performance?
Start: 2020-03-04. End: 2025-02-28.
What is the justification for the sole-source award, and were alternative solutions or competitors ever considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems. For the U-2 avionics refresh, it's likely that Lockheed Martin's deep knowledge of the platform and its existing systems made them the only viable option. However, a thorough review should confirm that no other qualified vendors were overlooked and that the government actively sought competitive bids where feasible.
How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns and ensure value for taxpayer money?
Effective management of a Cost Plus Fixed Fee (CPFF) contract requires stringent oversight, detailed cost tracking, and clear performance metrics. The Air Force must actively monitor all incurred costs, scrutinize expenditures, and ensure that the fixed fee remains appropriate given the scope of work. Regular audits and milestone reviews are essential to identify potential cost creep early and hold the contractor accountable for efficient performance.
What is the projected impact of this avionics refresh on the U-2's operational effectiveness and future sustainment costs?
The avionics refresh is intended to enhance the U-2's operational effectiveness by incorporating modern technologies, improving reliability, and potentially enabling new mission capabilities. This should reduce the risk of system failures and decrease unscheduled maintenance. However, the long-term sustainment costs of the upgraded avionics, including software updates and component replacements, need to be carefully projected and managed to ensure the overall cost-benefit analysis remains favorable.
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
Solicitation ID: FA852819R0022
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: $122,096,781
Exercised Options: $122,096,781
Current Obligation: $117,438,709
Actual Outlays: $1,602,260
Subaward Activity
Number of Subawards: 44
Total Subaward Amount: $33,581,816
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: 2020-03-04
Current End Date: 2025-02-28
Potential End Date: 2025-02-28 00:00:00
Last Modified: 2025-07-16
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