F-22 SEE EMD PART B contract awarded to Lockheed Martin Corporation for over $240 million

Contract Overview

Contract Amount: $240,490,639 ($240.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2027-03-31

End Date: 2027-03-31

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F-22 SEE EMD PART B

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $240.5 million to LOCKHEED MARTIN CORPORATION for work described as: F-22 SEE EMD PART B Key points: 1. Contract awarded to a single, large defense contractor, indicating potential for limited competition. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The contract duration extends to March 2027, suggesting a long-term commitment for this specific effort. 4. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing, a high-value sector. 5. The contract is not a small business set-aside, suggesting it is likely beyond the scope of typical small business capabilities. 6. The contract is being performed in Texas, a state with a significant aerospace and defense industrial base.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns and comparisons to similar F-22 program modifications. The Cost Plus Fixed Fee (CPFF) contract type, while common in complex development and specialized manufacturing, carries inherent risks of cost escalation. Without clear performance metrics and independent cost analysis, it's difficult to definitively assess value for money. However, the substantial award amount suggests a significant investment in the F-22 program's sustainment or upgrade.

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 used when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of a necessary good or service. For a specialized component or modification related to the F-22 program, it is plausible that Lockheed Martin is the only entity capable of fulfilling the requirement, potentially due to proprietary knowledge or existing infrastructure.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competitive pressures to drive down costs, potentially resulting in higher prices for taxpayers compared to a competed contract.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-22 Raptor fleet, ensuring continued operational readiness and potential enhancements. Services delivered likely involve specialized manufacturing, engineering, or sustainment activities critical to the F-22 program. The geographic impact is concentrated in Texas, supporting the local aerospace and defense industry and its workforce. Workforce implications include the potential for highly skilled engineering, manufacturing, and technical jobs within Lockheed Martin and its supply chain in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type increases risk of cost overruns.
Sole-source award limits competitive pricing and taxpayer value.
Lack of detailed performance metrics makes value assessment difficult.
Long contract duration requires sustained oversight.

Positive Signals

Award to a prime contractor with extensive experience on the F-22 program.
Contract supports a critical national defense asset (F-22 Raptor).
Performance in Texas leverages a strong aerospace industrial base.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts like this, supporting advanced fighter aircraft, represent a substantial portion of defense spending within this sector. The F-22 program, though no longer in production, requires ongoing sustainment, upgrades, and specialized manufacturing, often involving sole-source arrangements with the original equipment manufacturer. Comparable spending benchmarks would typically involve other major defense aircraft sustainment or modification contracts.

Small Business Impact

This contract is not a small business set-aside, indicating that the scope and complexity of the work are likely beyond the typical capabilities or contract vehicles available to small businesses. While Lockheed Martin is the prime contractor, there may be opportunities for small businesses to participate as subcontractors, depending on the specific requirements of the contract and Lockheed Martin's subcontracting plans. However, the direct award to a large prime suggests limited direct benefit to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature and CPFF structure, robust oversight focusing on cost control, performance monitoring, and adherence to contract terms is crucial. Transparency may be limited due to the sole-source nature, but contract modifications and performance reports would be subject to standard government review processes. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

F-22 Raptor Sustainment
Advanced Fighter Aircraft Manufacturing
Aerospace & Defense Prime Contracting
Cost Plus Fixed Fee Contracts
Department of the Air Force Procurement

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of detailed performance metrics
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $240.5 million to LOCKHEED MARTIN CORPORATION. F-22 SEE EMD PART B

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 $240.5 million.

What is the period of performance?

Start: 2027-03-31. End: 2027-03-31.

What is Lockheed Martin Corporation's track record with the F-22 program and similar sole-source contracts?

Lockheed Martin Corporation is the prime contractor for the F-22 Raptor program, responsible for its development, production, and sustainment. Their extensive history with the F-22 provides deep institutional knowledge and specialized capabilities, making them a logical choice for sole-source awards related to the aircraft. The company has a long track record of managing complex defense programs and large-scale sole-source contracts across various military platforms. While this expertise can ensure program continuity and leverage existing efficiencies, it also necessitates rigorous government oversight to ensure fair pricing and prevent potential cost inefficiencies inherent in non-competitive awards. Analysis of past performance on similar sole-source contracts would focus on cost performance, schedule adherence, and the effectiveness of government oversight in mitigating risks.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for aircraft manufacturing and sustainment in terms of value for money?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research, development, or complex manufacturing where the scope of work is not fully defined or is subject to change. It provides the contractor with reimbursement for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less incentive for the contractor to control costs, as the government bears the majority of the cost risk. However, FFP contracts can be difficult to implement for highly uncertain or evolving requirements. Best value for money is typically achieved through competitive bidding, regardless of contract type. For sustainment and modification, a well-defined scope could potentially be procured under FFP, offering greater cost certainty. The CPFF structure here suggests a degree of uncertainty or complexity in the 'EMD PART B' effort, making direct value comparison challenging without understanding the specific technical requirements and the rationale for choosing CPFF over other options.

What are the primary risks associated with this sole-source, CPFF contract for the F-22 program?

The primary risks associated with this sole-source, Cost Plus Fixed Fee (CPFF) contract for the F-22 program are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than could be achieved in a competitive bidding environment. This reduces the government's leverage in price negotiations. Secondly, the CPFF structure, while allowing for flexibility in evolving requirements, shifts a significant portion of the cost risk to the government. If not meticulously managed and overseen, this can result in cost overruns as the contractor is reimbursed for allowable costs, with the fixed fee providing less incentive for aggressive cost control compared to fixed-price arrangements. Additionally, the long-term nature of the contract requires sustained oversight to ensure performance objectives are met and that the contractor remains efficient throughout the contract period.

What historical spending patterns exist for F-22 sustainment and modification contracts awarded to Lockheed Martin?

Historical spending patterns for F-22 sustainment and modification contracts awarded to Lockheed Martin reveal a consistent and substantial investment in the platform since its inception. While specific figures for 'EMD PART B' are not publicly detailed in isolation, the overall sustainment and upgrade costs for the F-22 program have been significant over its lifecycle. These expenditures typically cover a range of activities including depot maintenance, component repair and overhaul, software updates, and integration of new capabilities. Lockheed Martin, as the prime contractor, has historically received the majority of these funds. Analysis of past spending often shows a trend of increasing sustainment costs as the fleet ages, alongside periodic investments in modernization efforts to maintain the F-22's technological edge. Understanding these patterns is crucial for forecasting future budgetary needs and assessing the long-term affordability of operating the F-22 fleet.

How does the geographic location of performance (Texas) influence the cost and execution of this contract?

The performance location in Texas, specifically within areas known for robust aerospace and defense industry clusters, can influence the cost and execution of this contract in several ways. Texas offers a skilled workforce experienced in aerospace manufacturing and engineering, potentially reducing recruitment and training costs for Lockheed Martin. The presence of established supply chains and supporting infrastructure within the state can also streamline logistics and component sourcing, contributing to more efficient execution. However, labor costs in regions with a high concentration of defense contractors can also be competitive, potentially driving up wages. Furthermore, state and local incentives or tax structures may impact the overall cost of doing business. While Texas provides a favorable environment for aerospace operations, the specific impact on this contract's cost would depend on detailed analysis of labor rates, local overhead, and any applicable economic development agreements.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1 LOCKHEED BLVD BLDG 10, 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: $320,488,136

Exercised Options: $320,488,136

Current Obligation: $240,490,639

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $428,699

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA861122D0001

IDV Type: IDC

Timeline