DoD awards $81.1M for aircraft manufacturing, with no competition and a firm fixed price contract
Contract Overview
Contract Amount: $81,126,436 ($81.1M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2017-09-29
End Date: 2019-12-31
Contract Duration: 823 days
Daily Burn Rate: $98.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: INDIA AIRCRAFT 13
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $81.1 million to LOCKHEED MARTIN CORP for work described as: INDIA AIRCRAFT 13 Key points: 1. The contract was awarded on a sole-source basis, raising questions about potential overpayment and lack of competitive pressure. 2. The firm fixed-price structure shifts risk to the contractor, which can be beneficial if costs are well-managed. 3. The duration of the contract (823 days) suggests a significant undertaking, requiring robust oversight. 4. The specific North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing, a specialized and high-value sector. 5. The contract's value of $81.1 million is substantial, necessitating careful scrutiny of its necessity and cost-effectiveness. 6. The absence of small business set-asides indicates this contract is likely beyond the scope or capability of most small businesses.
Value Assessment
Rating: questionable
Without competitive bids, it is difficult to benchmark the pricing for this aircraft manufacturing contract. The firm fixed-price nature suggests the contractor bears cost overruns, but the initial price could be inflated due to the lack of competition. Further analysis would require comparing this award to similar sole-source aircraft manufacturing contracts to assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corp, was solicited. This significantly limits price discovery and competition. The rationale for not competing the award needs to be thoroughly examined to ensure it was justified and in the government's best interest.
Taxpayer Impact: Taxpayers may have paid a premium for this aircraft manufacturing service due to the absence of competitive bidding, potentially leading to less efficient use of public funds.
Public Impact
The primary beneficiary is the Department of Defense, which will receive aircraft manufacturing services. The services delivered are critical for national defense capabilities. The contract is associated with Georgia (ST='GA', SN='GEORGIA'), indicating a potential geographic impact on that state's economy and workforce. The workforce implications likely involve skilled labor in aircraft manufacturing and related support roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- Sole-source awards require strong justification to ensure fair pricing.
- The firm fixed-price contract, while shifting risk, could be based on an inflated initial estimate without competitive pressure.
Positive Signals
- Firm fixed-price contract shifts cost overrun risk to the contractor.
- The contract is with a major defense contractor, potentially indicating established capabilities.
- The award is for aircraft manufacturing, a critical defense capability.
Sector Analysis
The aircraft manufacturing sector is a highly specialized and capital-intensive industry, crucial for national defense. Spending in this area is often characterized by long lead times, complex supply chains, and significant research and development costs. Comparable spending benchmarks are difficult to establish without detailed specifications, but contracts of this magnitude are typical for major defense platforms.
Small Business Impact
The absence of small business participation (SB=false) and set-asides (SS=false) suggests this contract is not structured to benefit small businesses. Large defense contracts for aircraft manufacturing typically require extensive resources, certifications, and experience that are beyond the capacity of most small businesses. Subcontracting opportunities for small businesses may exist but are not guaranteed or mandated by the contract terms.
Oversight & Accountability
Oversight for this contract would fall under the Department of Defense's contracting and procurement regulations, likely managed by the Defense Contract Management Agency (DCMA). Accountability measures would include performance monitoring against contract requirements and delivery schedules. Transparency is limited by the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Procurement, Air Force
- Combat Vehicles and Related Equipment
- Ammunition, Missiles and Related Armor and Artelery
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for inflated costs due to lack of competition.
- Requires robust oversight due to contract value and duration.
Tags
defense, department-of-defense, lockheed-martin-corp, aircraft-manufacturing, firm-fixed-price, sole-source, delivery-order, georgia, large-contract, naics-336411
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $81.1 million to LOCKHEED MARTIN CORP. INDIA AIRCRAFT 13
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $81.1 million.
What is the period of performance?
Start: 2017-09-29. End: 2019-12-31.
What is the specific type of aircraft being manufactured under this contract?
The provided data does not specify the exact type of aircraft. The NAICS code 336411 indicates general aircraft manufacturing. To determine the specific aircraft, one would need to consult the contract details or associated documentation, which are not included in the abbreviated data. This information is crucial for understanding the strategic importance and technical complexity of the award.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award is not provided in the abbreviated data. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. For a contract of this magnitude in aircraft manufacturing, potential justifications could include unique technological capabilities, proprietary designs, or essential integration with existing platforms. A thorough review of the contract file would be necessary to ascertain the official justification.
How does the $81.1 million award compare to historical spending on similar aircraft manufacturing contracts by the DoD?
Comparing this $81.1 million award requires access to historical spending data for similar aircraft manufacturing contracts. Without specific details on the aircraft type, quantity, and scope of work, a direct comparison is challenging. However, $81.1 million represents a significant investment. Analysis would involve identifying comparable contracts awarded over the past several years, considering factors like contract type, competition level, and the specific defense platform, to establish a benchmark for cost-effectiveness and market rates within the defense aerospace sector.
What are the key performance indicators (KPIs) and delivery milestones for this contract?
The abbreviated data does not detail the specific Key Performance Indicators (KPIs) or delivery milestones for this contract. These are typically outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). For an aircraft manufacturing contract, KPIs would likely focus on quality standards, adherence to technical specifications, production efficiency, and on-time delivery. Milestones would include critical stages of design, production, testing, and final delivery. The Defense Contract Management Agency (DCMA) would be responsible for monitoring performance against these metrics.
What is Lockheed Martin Corp's track record with sole-source defense contracts of this size?
Lockheed Martin Corporation is a major defense contractor with extensive experience in large-scale, sole-source contracts. Their track record includes numerous high-value awards across various defense platforms, including aircraft. While specific details on their past sole-source awards of similar value are not in the provided data, their history suggests a capacity to manage complex manufacturing processes. However, the justification and oversight for each sole-source award remain critical factors in assessing value and risk, regardless of the contractor's size or reputation.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063
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: $81,126,436
Exercised Options: $81,126,436
Current Obligation: $81,126,436
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $249,825
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862516D6458
IDV Type: IDC
Timeline
Start Date: 2017-09-29
Current End Date: 2019-12-31
Potential End Date: 2019-12-31 00:00:00
Last Modified: 2019-08-28
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)