F-22 Procurement of ATLAS: $115M for Aircraft Manufacturing by Lockheed Martin Corporation

Contract Overview

Contract Amount: $115,224,071 ($115.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-12-31

End Date: 2027-08-31

Contract Duration: 1,339 days

Daily Burn Rate: $86.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F-22 PROCUREMENT OF ATLAS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $115.2 million to LOCKHEED MARTIN CORPORATION for work described as: F-22 PROCUREMENT OF ATLAS Key points: 1. Value for money assessed through comparison to similar aircraft procurement contracts. 2. Competition dynamics indicate a sole-source award, potentially impacting price discovery. 3. Risk indicators include the sole-source nature and cost-plus contract type. 4. Performance context is within the Department of the Air Force's aircraft manufacturing needs. 5. Sector positioning is within the high-value defense manufacturing industry.

Value Assessment

Rating: fair

The contract value of $115.2 million for F-22 procurement of ATLAS appears substantial. Benchmarking against similar sole-source aircraft manufacturing contracts is challenging due to the unique nature of advanced fighter jet components. The Cost Plus Fixed Fee (CPFF) contract type suggests that while costs are tracked, the final price is capped, offering some cost control. However, CPFF contracts can sometimes incentivize higher spending compared to fixed-price agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This is common for highly specialized defense procurements where only one or a limited number of contractors possess the necessary technology, expertise, or existing production lines. The lack of competition means that price discovery through market forces was not a primary factor in this award.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive pricing. However, for critical defense systems like the F-22, the necessity of securing specialized components may outweigh the potential cost savings from competition.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially the F-22 program, ensuring the continued availability of critical components. Services delivered include the manufacturing and procurement of ATLAS components for the F-22 fighter jet. Geographic impact is centered in Texas, where Lockheed Martin Corporation's operations are located. Workforce implications include the employment of skilled labor in advanced aerospace manufacturing within the United States.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing pressure.
Cost Plus Fixed Fee contract type may not provide the strongest incentive for cost minimization.
Long contract duration (through August 2027) increases exposure to potential cost overruns or market shifts.

Positive Signals

Award to a prime contractor with extensive experience in F-22 production.
Fixed fee component of the contract provides a ceiling on contractor profit.
Contract is for a critical defense system, ensuring national security requirements are met.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on aircraft manufacturing. The market for advanced fighter jet components is highly specialized, dominated by a few large aerospace corporations. Spending in this area is driven by national security requirements and the need to maintain and upgrade existing fleets. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of such components, but overall defense aircraft procurement represents a significant portion of the federal budget.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Lockheed Martin Corporation is a large prime contractor. While prime contractors are often required to subcontract portions of their work to small businesses, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in this data. This award is unlikely to directly benefit small businesses through a set-aside but may indirectly through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and potentially the Department of Defense's Inspector General. Mechanisms likely include regular reporting requirements from the contractor, performance reviews, and audits. Transparency is generally limited for sole-source defense procurements, but accountability is maintained through contractual obligations and oversight bodies.

Related Government Programs

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

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $115.2 million to LOCKHEED MARTIN CORPORATION. F-22 PROCUREMENT OF ATLAS

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 $115.2 million.

What is the period of performance?

Start: 2023-12-31. End: 2027-08-31.

What is Lockheed Martin Corporation's track record with F-22 related procurements?

Lockheed Martin Corporation is the prime contractor for the F-22 Raptor program, responsible for its development, production, and sustainment. Their track record with F-22 procurements is extensive, spanning decades. They have consistently delivered aircraft and components, though like many large defense programs, the F-22 program has faced cost and schedule challenges over its lifecycle. The company's deep institutional knowledge and established supply chain for the F-22 are key reasons for its continued role in procuring components like ATLAS.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for aircraft manufacturing?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense procurement for complex projects where the scope of work or costs are difficult to define precisely upfront. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. This differs from Fixed Price contracts, where the price is set regardless of actual costs, incentivizing efficiency. Incentive contracts, like Cost Plus Incentive Fee (CPIF), share cost savings or overruns between the government and contractor. CPFF offers the government some cost certainty with the fixed fee but may provide less incentive for the contractor to control costs compared to fixed-price arrangements.

What are the primary risks associated with sole-source procurements for advanced aircraft components?

The primary risks associated with sole-source procurements for advanced aircraft components include a lack of competitive pricing, potentially leading to higher costs for the government. Without competition, there is reduced pressure on the contractor to innovate or improve efficiency. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, making future procurements or changes more difficult and expensive. Furthermore, sole-source awards can sometimes be perceived as less transparent, raising concerns about fairness and value for taxpayer money, although this is often mitigated by robust oversight.

What is the significance of the ATLAS component within the F-22 program?

The specific nature and significance of the 'ATLAS' component within the F-22 program are not publicly detailed in the provided data. However, given the context of 'Aircraft Manufacturing' and the F-22's role as an advanced stealth fighter jet, ATLAS likely refers to a critical system, sub-assembly, or advanced material essential for the aircraft's performance, avionics, structural integrity, or operational capabilities. Procurements for such specialized components are often sole-source due to proprietary technology, unique manufacturing processes, or the need for seamless integration with existing systems.

How does the contract duration of over three years impact cost and performance oversight?

A contract duration extending from December 2023 to August 2027 (approximately 33 months) for aircraft component manufacturing presents both opportunities and challenges for cost and performance oversight. A longer duration allows for more stable production planning and potentially economies of scale for the contractor. However, it also increases the government's exposure to potential cost increases due to inflation, material price fluctuations, or unforeseen technical challenges over time. Effective oversight requires continuous monitoring of performance metrics, regular cost reviews, and proactive risk management to address issues as they arise throughout the contract period.

What is the typical market size for advanced aircraft manufacturing components like those for the F-22?

The market size for advanced aircraft manufacturing components, particularly for high-performance military aircraft like the F-22, is substantial but highly concentrated. This segment is dominated by a few major aerospace and defense prime contractors and their specialized suppliers. While precise figures for specific components like 'ATLAS' are proprietary, the global military aircraft market is valued in the hundreds of billions of dollars annually. The F-22 program itself, over its lifetime, represented billions in investment. The demand is driven by defense budgets, geopolitical factors, and the need for technological superiority.

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: $139,163,084

Exercised Options: $139,163,084

Current Obligation: $115,224,071

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