DoD's $73.3M Lockheed Martin Contract for LAIRCM Spares Lacks Competition, Raises Oversight Concerns
Contract Overview
Contract Amount: $73,339,643 ($73.3M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2007-06-28
End Date: 2015-10-31
Contract Duration: 3,047 days
Daily Burn Rate: $24.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF GROUP A AND ASSOCIATED SPARES TO SUPPORT INSTALLATION OF LARGE AIRCRAFT INFRARED COUNTERMEASURES (LAIRCM)
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $73.3 million to LOCKHEED MARTIN CORP for work described as: PROCUREMENT OF GROUP A AND ASSOCIATED SPARES TO SUPPORT INSTALLATION OF LARGE AIRCRAFT INFRARED COUNTERMEASURES (LAIRCM) Key points: 1. Significant spending on specialized aircraft countermeasures, indicating a critical defense need. 2. Sole reliance on Lockheed Martin for essential LAIRCM components suggests potential market concentration. 3. Long contract duration (2007-2015) with a high value warrants scrutiny of ongoing necessity and pricing. 4. The 'Other Aircraft Parts' sector is broad; specific LAIRCM component costs are not benchmarked. 5. Lack of competition raises questions about price discovery and potential for inflated costs.
Value Assessment
Rating: questionable
The contract value of $73.3M over 8 years for specialized aircraft parts is substantial. Without comparable contract data for similar LAIRCM components or systems, assessing pricing against industry benchmarks is difficult. The lack of competition further complicates a fair value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially limiting price discovery and leading to higher costs for taxpayers. The justification for sole-source procurement is critical for understanding this decision.
Taxpayer Impact: The absence of competition likely results in higher prices than a competed procurement, directly impacting taxpayer funds allocated to defense.
Public Impact
Enhances survivability of critical Air Force aircraft against infrared threats. Supports a key component of national defense infrastructure. Potential for increased costs due to lack of competitive bidding. Long-term sustainment of aging aircraft systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Supports critical defense capability (LAIRCM)
- Long-standing relationship with a known supplier
Sector Analysis
This procurement falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in defense aerospace components is often characterized by high R&D costs, specialized manufacturing, and long product lifecycles. Benchmarking is challenging due to the unique nature of military hardware.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corp, a large prime contractor. There is no explicit information suggesting small business participation or subcontracting opportunities within this specific contract award.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of Defense to ensure fair pricing and prevent potential cost overruns. Auditing the necessity and cost-effectiveness of the sole-source justification is paramount for accountability.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for cost overruns due to lack of competition.
- Long contract duration may not reflect current market conditions.
- Limited transparency on specific component costs.
- No indication of small business participation.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ga, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.3 million to LOCKHEED MARTIN CORP. PROCUREMENT OF GROUP A AND ASSOCIATED SPARES TO SUPPORT INSTALLATION OF LARGE AIRCRAFT INFRARED COUNTERMEASURES (LAIRCM)
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
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 $73.3 million.
What is the period of performance?
Start: 2007-06-28. End: 2015-10-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative solutions or competitors evaluated?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of viable alternatives. For this LAIRCM contract, the Department of Defense would need to demonstrate that Lockheed Martin was the only source capable of meeting the specific technical requirements. A thorough review would involve assessing if market research was conducted to identify potential competitors and if any were disqualified based on technical or capability limitations.
How does the per-unit cost of these LAIRCM spares compare to similar components or systems procured competitively by other agencies or allies?
Without specific unit cost data and comparable benchmarks, it's impossible to definitively assess value. However, the lack of competition inherently raises concerns that the per-unit cost may be higher than if the contract were competed. Further analysis would require access to detailed cost breakdowns and comparisons with similar, competitively procured defense electronics or aircraft parts to establish a fair market price.
Given the contract's duration and sole-source nature, what mechanisms are in place to ensure ongoing cost control and prevent vendor lock-in for future LAIRCM support?
Mechanisms for cost control in sole-source contracts often include stringent negotiation, independent cost analysis, and phased contract reviews. To prevent vendor lock-in, the DoD should actively pursue strategies like developing alternative sources, encouraging technology insertion from other vendors, or investing in internal capabilities for future support. Regular market research and competitive prototyping are essential to mitigate long-term reliance.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $73,339,643
Exercised Options: $73,339,643
Current Obligation: $73,339,643
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-06-28
Current End Date: 2015-10-31
Potential End Date: 2015-10-31 00:00:00
Last Modified: 2021-12-08
More Contracts from Lockheed Martin Corp
- Federal Contract — $48.1B (Department of Energy)
- TAS::80 0124::TAS Design, Development, Test&evaluation of Project Orion — $15.5B (National Aeronautics and Space Administration)
- 200207!000021!5700!CZ62 !smc/Pkj LOS Angeles AFB !F0470102C0002 !A!N! !N! !20011116!20070630!872978978!196596688!834951691!n!lockheed Martin Corporation !1111 Lockheed Martin WAY !sunnyvale !ca!94089!77000!085!06!sunnyvale !santa Clara !california!+000012250000!n!n!000000000000!ar92!rdte/Space - Other - Applied Research !A2 !missile and Space Systems !3gfk!milstar !541710!E! !1! ! ! ! ! !99990909!B! ! !B! !d!n!j!2!001!n!2a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $9.0B (Department of Defense)
- Next Generation Overhead Persistent Infrared Geosynchronous Earth Orbit Space Vehicle 1-3 Phase 1 — $7.3B (Department of Defense)
- Federal Contract — $7.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)