DoD awards $2.65B F-22 'In-a-Box' contract to Lockheed Martin, raising concerns about competition and value
Contract Overview
Contract Amount: $26,552,117 ($26.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-08-28
End Date: 2023-04-30
Contract Duration: 1,341 days
Daily Burn Rate: $19.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: F-22 IN-A-BOX
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $26.6 million to LOCKHEED MARTIN CORPORATION for work described as: F-22 IN-A-BOX Key points: 1. Significant contract value of $2.65 billion for aircraft manufacturing. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Fixed Fee contract type. 4. Focus on aircraft manufacturing sector, specifically fighter jets.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, coupled with a lack of competition, makes a definitive value assessment difficult. Benchmarking against similar sole-source contracts for advanced aircraft is challenging but suggests potential for higher costs than a competitive process.
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 significantly limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive bidding process.
Taxpayer Impact: The lack of competition in this large contract likely results in higher taxpayer expenditure than would be achieved through a competitive procurement.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The F-22 program's advanced capabilities are critical for national defense. Long-term sustainment and upgrade costs for such complex aircraft are substantial.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of transparency in pricing
Positive Signals
- Critical defense asset
- Established manufacturer with expertise
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing. Spending benchmarks for advanced fighter jet programs are typically high, but sole-source awards can inflate these figures significantly.
Small Business Impact
There is no indication of small business participation in this specific contract award. The prime contractor, Lockheed Martin, is a large aerospace corporation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure cost reasonableness and prevent potential waste. Robust auditing of the Cost Plus Fixed Fee elements is crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- Limited transparency in pricing
- High contract value
Tags
aircraft-manufacturing, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.6 million to LOCKHEED MARTIN CORPORATION. F-22 IN-A-BOX
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 $26.6 million.
What is the period of performance?
Start: 2019-08-28. End: 2023-04-30.
What specific justification was provided for the sole-source award, and how does it align with FAR regulations for non-competitive procurements?
The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or urgent needs that only one contractor can meet. For the F-22 program, this could relate to specialized manufacturing processes or unique system integration expertise held by Lockheed Martin. However, regulatory compliance requires rigorous documentation and justification to ensure it's truly the only viable option.
How does the Cost Plus Fixed Fee structure impact the contractor's incentive to control costs and ensure efficient project execution?
The Cost Plus Fixed Fee (CPFF) structure reimburses the contractor for allowable costs plus a predetermined fixed fee. While the fee provides some incentive for efficiency, it can also reduce the contractor's motivation to aggressively control costs compared to fixed-price contracts. The government bears the risk of cost overruns, necessitating strong oversight to manage expenditures effectively.
What are the long-term implications of awarding such a significant contract without competition on future defense procurement strategies and pricing?
Consistently awarding large, critical defense contracts on a sole-source basis can stifle competition in the long run, potentially leading to higher baseline costs for future procurements. It may also discourage new entrants or smaller firms from developing capabilities if major programs are perpetually awarded to incumbents, impacting innovation and market dynamics.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108
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: $26,552,117
Exercised Options: $26,552,117
Current Obligation: $26,552,117
Actual Outlays: $991,280
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $838,375
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA861113D2850
IDV Type: IDC
Timeline
Start Date: 2019-08-28
Current End Date: 2023-04-30
Potential End Date: 2023-04-30 00:00:00
Last Modified: 2023-09-28
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