DoD Awards $216M F-16 Production Contract to Lockheed Martin for Bulgaria
Contract Overview
Contract Amount: $215,991,040 ($216.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-09-14
End Date: 2027-09-30
Contract Duration: 1,477 days
Daily Burn Rate: $146.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: BULGARIA II F-16 PRODUCTION BLOCK 70
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $216.0 million to LOCKHEED MARTIN CORPORATION for work described as: BULGARIA II F-16 PRODUCTION BLOCK 70 Key points: 1. This contract supports the production of F-16 aircraft for Bulgaria, a key NATO ally. 2. Lockheed Martin is the sole provider of F-16 aircraft, limiting competition. 3. The fixed-price incentive contract type aims to control costs while incentivizing performance. 4. The sector is dominated by a few large defense contractors, with limited opportunities for new entrants.
Value Assessment
Rating: good
The contract value of $215.99 million for 1477 days of performance appears reasonable for advanced fighter jet production. Benchmarking against similar F-16 production contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract is sole-source due to the unique nature of F-16 production, which is exclusively handled by Lockheed Martin. This limits price discovery through competitive bidding, making cost realism assessments critical.
Taxpayer Impact: Taxpayer funds are being used to procure advanced military aircraft for an allied nation, enhancing collective security but representing a significant expenditure.
Public Impact
Enhances NATO's air defense capabilities through modernization of Bulgarian Air Force. Supports U.S. foreign policy objectives by strengthening an allied nation's military. Contributes to the U.S. aerospace and defense industrial base. Potential for follow-on sustainment and training contracts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source nature limits competitive pricing.
- Long contract duration could lead to cost overruns if not managed effectively.
- Geopolitical risks associated with international arms sales.
Positive Signals
- Strengthens alliance capabilities.
- Supports U.S. defense industry.
- Fixed-price incentive contract provides some cost control.
Sector Analysis
The defense sector, particularly aircraft manufacturing, is characterized by high barriers to entry and significant government investment. Spending benchmarks for fighter jet production are typically in the hundreds of millions to billions of dollars.
Small Business Impact
This contract is awarded to a large prime contractor, Lockheed Martin. There is no specific information provided regarding subcontracting opportunities for small businesses on this particular award.
Oversight & Accountability
The Department of the Air Force is responsible for oversight. The fixed-price incentive contract structure includes performance targets that should be monitored to ensure value for money and accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source procurement limits competitive pressure on pricing.
- Potential for cost growth over the contract duration.
- Dependence on a single manufacturer for critical defense assets.
- International sales can be subject to geopolitical shifts and export control regulations.
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $216.0 million to LOCKHEED MARTIN CORPORATION. BULGARIA II F-16 PRODUCTION BLOCK 70
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 $216.0 million.
What is the period of performance?
Start: 2023-09-14. End: 2027-09-30.
What is the projected cost per aircraft, and how does it compare to previous F-16 production runs or similar aircraft?
The total contract value is $215,991,040 for an unspecified number of aircraft (implied by 'Aircraft Manufacturing' and '1' in 'no'). If we assume 'no' refers to the number of lots or major phases, and 'dur' (duration) is in days, a precise per-unit cost is difficult to ascertain without knowing the exact quantity. However, historical F-16 Block 70/72 aircraft have unit costs ranging from $50 million to over $80 million depending on configuration and support packages.
What are the specific performance metrics and incentives tied to the 'Fixed Price Incentive' contract type, and how will they be measured?
The contract details do not specify the exact performance metrics or incentive targets. Typically, Fixed Price Incentive (FPI) contracts establish a target cost, target profit, and a price ceiling. The final price is determined based on the actual cost incurred, with profit adjusting between the target profit and a maximum profit if costs are below the ceiling. Oversight will focus on tracking costs against the target and ensuring delivery meets quality and schedule requirements.
What is the long-term strategy for supporting these F-16s, and what is the estimated total lifecycle cost for Bulgaria?
This contract focuses on the production phase. Long-term support, including maintenance, spare parts, upgrades, and training, would likely be covered by separate contracts or agreements. The total lifecycle cost for Bulgaria would encompass not only the acquisition cost but also sustainment, operational expenses, and potential future modernization efforts over the operational life of the aircraft.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
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: $555,314,000
Exercised Options: $555,314,000
Current Obligation: $215,991,040
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-14
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2025-12-22
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