Over $3 billion awarded to Lockheed Martin for F-22 aircraft manufacturing, with a significant portion for airframes and spares

Contract Overview

Contract Amount: $3,016,438,810 ($3.0B)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2004-06-01

End Date: 2012-08-19

Contract Duration: 3,001 days

Daily Burn Rate: $1.0M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200410!000065!5700!GU75 !ASC/YFK !FA861104C2851 !A!N! !N! ! !20040601!20041031!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000492000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !265 !F-22 !336411!E! !1! ! ! ! ! !99990909!B! ! !A! !C!N!J!1!001!N!1B!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $3.02 billion to LOCKHEED MARTIN CORPORATION for work described as: 200410!000065!5700!GU75 !ASC/YFK !FA861104C2851 !A!N! !N! ! !20040601!20041031!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000492000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AI… Key points: 1. The contract value represents a substantial investment in advanced aircraft production. 2. Sole-source award suggests limited market alternatives or specific technological requirements. 3. Long contract duration indicates a sustained need for F-22 support and production. 4. The award falls within the broader defense sector's focus on strategic airpower. 5. High contract value may indicate complex manufacturing processes and specialized components.

Value Assessment

Rating: questionable

The total award of over $3 billion for F-22 aircraft manufacturing is a significant sum. Without comparable sole-source contracts for similar advanced fighter jets, it is difficult to definitively benchmark value. However, the 'NOT COMPETED' status raises concerns about potential overpricing compared to what might be achieved through a competitive bidding process. The firm fixed-price nature provides some cost certainty, but the lack of competition limits transparency in pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was considered. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when there are urgent national security needs that preclude a lengthy competitive process. The lack of competition means that the government did not benefit from price discovery through multiple bids.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct rivals for this award.

Public Impact

The primary beneficiaries are the U.S. Air Force, which receives advanced F-22 fighter aircraft. Services delivered include the manufacturing of F-22 aircraft, airframes, and associated spares. The geographic impact is concentrated in Fort Worth, Texas, where Lockheed Martin's facility is located. Workforce implications include employment for skilled engineers, technicians, and manufacturing personnel at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
High contract value increases financial exposure.
Long contract duration may lead to cost overruns if not managed effectively.
Reliance on a single contractor for critical defense assets poses supply chain risk.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to a major defense contractor with established expertise.
Focus on advanced aircraft production supports national security objectives.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on fighter aircraft. The market for advanced military aircraft is highly concentrated, with a few major prime contractors dominating. Spending in this area is driven by national defense priorities and technological advancements. Comparable spending benchmarks would typically involve other large-scale military aircraft procurement contracts, often characterized by high unit costs and long production cycles.

Small Business Impact

There is no indication of a small business set-aside for this contract. As a sole-source award to a large prime contractor, the primary subcontracting opportunities would likely be managed by Lockheed Martin. The extent to which small businesses would benefit would depend on Lockheed Martin's subcontracting plan and its sourcing strategies within its supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and specifications. Accountability measures are inherent in the firm fixed-price structure, which places cost risk on the contractor. Transparency is limited due to the sole-source nature of the award.

Related Government Programs

F-22 Raptor Program
Advanced Fighter Aircraft Procurement
Defense Manufacturing Contracts
Aerospace Industry Spending

Risk Flags

Sole-source award
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.02 billion to LOCKHEED MARTIN CORPORATION. 200410!000065!5700!GU75 !ASC/YFK !FA861104C2851 !A!N! !N! ! !20040601!20041031!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000492000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !265 !F-22 !336411!E! !1! ! ! ! ! !99990909!B! ! !A! !C!N!J!1!001!N!1B!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

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 $3.02 billion.

What is the period of performance?

Start: 2004-06-01. End: 2012-08-19.

What is the historical spending trend for the F-22 program with Lockheed Martin?

The provided data reflects a single large award of over $3 billion for F-22 aircraft manufacturing. To understand the historical spending trend, one would need to examine cumulative contract awards for the F-22 program over its lifecycle. This would involve analyzing multiple contract actions, including initial development, production phases, and sustainment contracts awarded to Lockheed Martin and potentially other key suppliers. A comprehensive review would reveal the total investment in the F-22 program and how spending has evolved, considering factors like production rates, engineering changes, and sustainment requirements over the years.

How does the per-unit cost of the F-22 under this contract compare to other advanced fighter jets?

The data provided does not allow for a direct per-unit cost calculation as it represents a total award value for aircraft and spares, not a fixed number of units at a specific price. However, the F-22 is known to be one of the most expensive fighter aircraft ever produced. Its advanced stealth technology, sensor fusion, and performance capabilities contribute to a high unit cost. Benchmarking against other advanced fighters like the F-35, Eurofighter Typhoon, or Rafale would require access to their specific contract details, including unit prices and the scope of work covered by those awards. Given the F-22's unique capabilities and its sole-source procurement status for much of its production, its per-unit cost is likely at the higher end of the spectrum for modern fighter aircraft.

What are the specific risks associated with a sole-source award of this magnitude?

A sole-source award of this magnitude carries several significant risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures inherent in a competitive bidding process. Secondly, it creates a high degree of dependency on a single contractor, potentially leading to supply chain vulnerabilities if that contractor faces production issues, financial instability, or strategic shifts. Thirdly, without competitive benchmarking, it can be challenging to ensure the government is receiving the best possible value for its investment. Finally, sole-source contracts can sometimes face greater public and congressional scrutiny regarding their justification and fairness.

What is Lockheed Martin's track record with large-scale defense manufacturing contracts?

Lockheed Martin Corporation has an extensive and well-established track record in manufacturing large-scale defense systems, including fighter aircraft, helicopters, missiles, and satellites. They are the prime contractor for numerous high-value, complex defense programs for the U.S. Department of Defense and international allies. Their experience includes programs like the F-35 Lightning II, C-130 Hercules transport aircraft, and various missile systems. While their history demonstrates a capability to deliver complex platforms, they have also faced scrutiny regarding program costs and schedules on some large programs, which is common in the defense industry for cutting-edge technology.

How does this contract contribute to the U.S. Air Force's overall air superiority strategy?

This contract, focused on the manufacturing of F-22 aircraft and spares, directly supports the U.S. Air Force's air superiority strategy. The F-22 Raptor is a fifth-generation stealth fighter designed to engage and defeat advanced air threats, providing air dominance in contested airspace. By ensuring the continued production and availability of F-22 airframes and critical spares, this contract helps maintain and enhance the operational readiness of the U.S. Air Force's premier air superiority platform. This capability is crucial for projecting power, deterring adversaries, and ensuring freedom of action in complex operational environments.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: LOCKHEED BLVD, FORT WORTH, TX, 76101

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,016,138,364

Exercised Options: $3,016,138,364

Current Obligation: $3,016,438,810

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline