DoD Awards $27.1M to Lockheed Martin for U-2 Aircraft Sustainment, No Competition
Contract Overview
Contract Amount: $27,112,551 ($27.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-12-16
End Date: 2026-11-30
Contract Duration: 2,541 days
Daily Burn Rate: $10.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST NO FEE
Sector: Defense
Official Description: U-2 PDM/SUSTAINMENT - QUANTUM LEAP
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599
Plain-Language Summary
Department of Defense obligated $27.1 million to LOCKHEED MARTIN CORPORATION for work described as: U-2 PDM/SUSTAINMENT - QUANTUM LEAP Key points: 1. Significant contract value for sustainment of a critical intelligence, surveillance, and reconnaissance (ISR) platform. 2. Sole-source award to Lockheed Martin, the original equipment manufacturer, raises questions about price discovery. 3. Long contract duration (2019-2026) suggests ongoing sustainment needs for the aging U-2 fleet. 4. Focus on aircraft manufacturing sector, highlighting specialized defense industrial base capabilities.
Value Assessment
Rating: questionable
The contract value of $27.1 million for sustainment services is difficult to benchmark without detailed cost breakdowns. As a sole-source award to the OEM, there's a risk of inflated pricing due to limited competitive pressure.
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. This approach is often used for specialized systems where only the original manufacturer can provide sustainment, but it limits opportunities for price reduction through competition.
Taxpayer Impact: The lack of competition may lead to higher costs for taxpayers compared to a competitively awarded contract, as there is less incentive for the contractor to offer the lowest possible price.
Public Impact
Ensures continued operational readiness of the U-2 reconnaissance aircraft, vital for national security. Supports specialized jobs within the aerospace and defense industry. Potential for higher costs impacts overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Critical national security asset sustainment
- Experienced OEM provider
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically supporting the sustainment of a legacy intelligence, surveillance, and reconnaissance (ISR) platform. Defense spending in this area is crucial for maintaining technological superiority and operational capabilities.
Small Business Impact
This contract was awarded directly to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, which is common for sole-source awards of this nature.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure fair and reasonable pricing. Transparency in cost reporting and justification for the lack of competition would be key areas for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition
- Potential for price inflation
- Long-term dependency on OEM
- Limited transparency on cost drivers
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.1 million to LOCKHEED MARTIN CORPORATION. U-2 PDM/SUSTAINMENT - QUANTUM LEAP
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 $27.1 million.
What is the period of performance?
Start: 2019-12-16. End: 2026-11-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically centers on the unique capabilities or proprietary nature of the product or service, where only one responsible source can provide the required sustainment for the U-2 aircraft. To ensure fair and reasonable pricing, the government would likely conduct a price analysis based on historical data, cost proposals, and potentially independent government cost estimates. However, without competitive proposals, the inherent risk of higher costs remains.
What are the long-term implications of relying on a sole-source provider for critical aircraft sustainment, particularly regarding technological evolution and cost control?
Long-term reliance on a sole-source provider can stifle innovation and lead to escalating costs as the contractor faces no competitive pressure to improve efficiency or offer better pricing. It also creates a dependency that can be strategically risky. The government must actively manage the relationship, potentially through robust contract clauses, performance metrics, and continuous cost monitoring, to mitigate these risks and encourage cost-effective sustainment.
How does the sustainment of the U-2 platform align with the Air Force's broader modernization strategy, and are there plans for eventual replacement?
The U-2 platform, while aging, continues to provide unique ISR capabilities that may not be fully replicated by newer systems. Its sustainment aligns with the Air Force's strategy to maintain a diverse ISR portfolio while potentially phasing in next-generation platforms. The long duration of this contract suggests the U-2 will remain operational for a significant period, implying that replacement plans are either long-term or that the U-2's role is evolving rather than being immediately superseded.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA852820R0004
Pricing Type: COST NO FEE (S)
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: $28,058,589
Exercised Options: $28,058,589
Current Obligation: $27,112,551
Actual Outlays: $987,096
Subaward Activity
Number of Subawards: 9
Total Subaward Amount: $4,081,368
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: 2019-12-16
Current End Date: 2026-11-30
Potential End Date: 2026-12-30 00:00:00
Last Modified: 2026-01-26
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