DoD's $56.8M F-16 Retrofit Program Awarded to Lockheed Martin for Omani Aircraft

Contract Overview

Contract Amount: $56,780,834 ($56.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2012-10-12

End Date: 2018-07-31

Contract Duration: 2,118 days

Daily Burn Rate: $26.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OMAN F-16 RETROFIT PROGRAM

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $56.8 million to LOCKHEED MARTIN CORPORATION for work described as: OMAN F-16 RETROFIT PROGRAM Key points: 1. Contract awarded for aircraft manufacturing services, specifically retrofitting Omani F-16s. 2. Sole-source award to Lockheed Martin suggests limited competition and potential for higher pricing. 3. The contract duration of 2118 days indicates a long-term commitment to the program. 4. Fixed-price contract type aims to control costs, but the lack of competition is a risk. 5. The program is situated within the broader defense sector, supporting international military readiness. 6. Texas is the performance location, potentially impacting local aerospace workforce and supply chains.

Value Assessment

Rating: fair

The contract value of $56.8 million for retrofitting F-16 aircraft for Oman is difficult to benchmark without specific details on the scope of work. As a sole-source award to Lockheed Martin, a primary manufacturer of F-16s, the pricing is likely based on established rates. However, the absence of competitive bidding prevents a direct comparison to market alternatives and raises questions about whether the government secured the best possible value. The firm fixed-price structure offers some cost certainty, but the overall value proposition is clouded by the lack of competition.

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 solicited. This approach is typically used when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for other manufacturers or service providers to offer alternative solutions or pricing, potentially leading to a less favorable price for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing bids, there is less assurance that the price reflects the lowest reasonable cost for the required services.

Public Impact

The primary beneficiaries are the Omani Air Force, receiving upgraded F-16 aircraft for enhanced defense capabilities. The services delivered include retrofitting and modernization of existing F-16 aircraft. The geographic impact is primarily in Texas, where the contract performance is located, supporting the local aerospace industry. Workforce implications include employment for skilled technicians and engineers involved in aircraft modification and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises concerns about whether the most innovative or cost-effective solutions were considered.
Long contract duration (2118 days) could lead to cost overruns if not managed tightly, despite fixed-price structure.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award to Lockheed Martin, the original equipment manufacturer, ensures specialized knowledge and integration.
Contract supports a key international ally, contributing to regional security and U.S. foreign policy objectives.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, a significant segment of the U.S. industrial base. The market for aircraft manufacturing and modification is dominated by a few large prime contractors, including Lockheed Martin. Spending in this area is driven by military modernization programs, both domestic and for allied nations. Comparable spending benchmarks would typically involve other F-16 upgrade programs or similar aircraft modification contracts, which are often complex and high-value.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Lockheed Martin, is a large aerospace corporation. There is no explicit information provided regarding subcontracting plans to small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve a supply chain that includes smaller enterprises.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices within the Air Force. As a definitive contract, it is subject to standard oversight mechanisms. Transparency regarding the specific details of the retrofit work and cost breakdowns may be limited due to the sole-source nature and potential classification of defense-related activities. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

F-16 Fighting Falcon Program
Foreign Military Sales (FMS)
Aerospace Manufacturing Contracts
Defense Article Maintenance and Repair

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns despite fixed price
Limited transparency on specific services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.8 million to LOCKHEED MARTIN CORPORATION. OMAN F-16 RETROFIT PROGRAM

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 $56.8 million.

What is the period of performance?

Start: 2012-10-12. End: 2018-07-31.

What specific retrofitting services are included in the $56.8 million contract for the Omani F-16s?

The provided data does not detail the specific retrofitting services included in the $56.8 million contract. Typically, F-16 retrofits can encompass a range of upgrades, such as avionics modernization, radar system enhancements, structural improvements, weapons system integration, or electronic warfare suite upgrades. Given the sole-source award to Lockheed Martin, the scope likely aligns with their proprietary upgrade packages for the F-16 platform. A comprehensive understanding would require access to the contract's statement of work (SOW), which is not publicly available in this dataset. The duration of the contract (2118 days) suggests a substantial scope of work beyond simple maintenance.

How does the $56.8 million cost compare to similar F-16 upgrade programs for other nations?

Direct cost comparison for similar F-16 upgrade programs is challenging without detailed specifications of the work performed and the specific upgrade packages utilized. The $56.8 million figure is for retrofitting Omani F-16s by Lockheed Martin. Other F-16 upgrade programs, such as those for Taiwan or South Korea, have involved significantly different scopes and costs, sometimes reaching hundreds of millions of dollars for comprehensive modernization packages. The firm fixed-price nature of this contract suggests a defined scope, but the lack of competition prevents a true benchmark against alternative providers or pricing structures. The value is best assessed internally by the Air Force against their specific requirements for the Omani fleet.

What are the primary risks associated with this sole-source contract award?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without competing proposals, there is less assurance that the government secured the most cost-effective solution. Another risk is the potential for scope creep or inefficiencies if the contractor does not face market pressure to optimize performance. Furthermore, reliance on a single source can create dependency and limit flexibility in future upgrades or support. The long duration also presents a risk of unforeseen cost increases or schedule delays, although the fixed-price nature aims to mitigate this.

What is Lockheed Martin's track record with F-16 manufacturing and upgrades?

Lockheed Martin Corporation has an extensive and well-established track record as the original manufacturer of the F-16 Fighting Falcon. They have been responsible for the design, production, and ongoing sustainment and upgrade programs for the F-16 fleet worldwide for decades. Their experience encompasses numerous upgrade packages tailored to various customer requirements, including avionics, structural, and weapons system enhancements. This deep institutional knowledge and direct experience with the platform make them the logical, albeit sole, source for complex retrofitting and modernization efforts, ensuring compatibility and performance.

What is the historical spending pattern for F-16 related contracts within the Department of Defense?

Historical spending patterns for F-16 related contracts within the Department of Defense are substantial and span decades, reflecting the F-16's long service life and its role as a key fighter aircraft. Spending encompasses new aircraft procurement, upgrades, modifications, spare parts, maintenance, and sustainment. While specific aggregate figures fluctuate annually based on modernization cycles and foreign military sales, the DoD consistently allocates significant resources to its F-16 fleet and those of its allies. Contracts range from large-scale fleet-wide upgrades costing hundreds of millions to smaller, specific component procurements or specialized service agreements like this Omani retrofit program.

How does the performance location in Texas potentially impact the contract's execution and cost?

The performance location in Texas, specifically noted as 'TX', likely indicates that the retrofitting work will be carried out at a Lockheed Martin facility or a partner facility within the state, such as their Fort Worth manufacturing plant, which is a major F-16 production and upgrade center. Performing the work in Texas could leverage a skilled aerospace workforce and established supply chains within the region, potentially streamlining execution. However, labor costs and overhead in a major aerospace hub like Texas might be higher compared to other locations, which could influence the overall cost, even under a fixed-price contract. Proximity to other defense industry resources in Texas could also facilitate collaboration and material sourcing.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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: 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: $56,780,834

Exercised Options: $56,780,834

Current Obligation: $56,780,834

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline