DoD Awards $69M Enterprise Spares Contract to Lockheed Martin, Not Competed
Contract Overview
Contract Amount: $69,112,164 ($69.1M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2018-08-13
End Date: 2021-06-30
Contract Duration: 1,052 days
Daily Burn Rate: $65.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FIVE YEAR ORDERING CONTRACT ENTERPRISE SPARES
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $69.1 million to LOCKHEED MARTIN CORP for work described as: FIVE YEAR ORDERING CONTRACT ENTERPRISE SPARES Key points: 1. Significant contract value of $69.1 million over five years. 2. Sole-source award to Lockheed Martin raises questions about competition. 3. Potential risk of inflated pricing due to lack of competitive bidding. 4. Contract falls within the Aircraft Manufacturing sector.
Value Assessment
Rating: questionable
The contract's value of $69.1 million is substantial. Without competitive bidding, it's difficult to assess if this price is fair compared to similar enterprise spares contracts. Benchmarking against industry standards for aircraft parts is crucial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.
Taxpayer Impact: Taxpayers may bear higher costs due to the absence of competitive pressure on pricing for these essential aircraft spares.
Public Impact
Ensures availability of critical aircraft spare parts for the Department of Defense. Potential for higher costs impacts overall defense budget allocation. Lack of transparency in pricing may erode public trust in procurement processes.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Ensures supply of critical parts
- Long-term ordering contract
Sector Analysis
This contract is within the Aircraft Manufacturing sector, specifically for enterprise spares. Spending benchmarks in this sector often reflect the high cost of specialized aerospace components and the importance of supply chain reliability for defense readiness.
Small Business Impact
The contract data indicates that small business participation was not a stated factor (ss: false, sb: false). This sole-source award to a large corporation like Lockheed Martin likely offers no direct opportunities for small businesses in this specific procurement.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature limits the effectiveness of competitive oversight mechanisms for price reasonableness.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for price gouging
- Limited small business participation
- Lack of transparency in pricing justification
- Risk of vendor lock-in
Tags
aircraft-manufacturing, department-of-defense, ga, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.1 million to LOCKHEED MARTIN CORP. FIVE YEAR ORDERING CONTRACT ENTERPRISE SPARES
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 $69.1 million.
What is the period of performance?
Start: 2018-08-13. End: 2021-06-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable without competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's presumed the agency assessed these factors. However, the absence of competition inherently weakens the price discovery process, necessitating rigorous internal review and benchmarking against historical data or similar sole-source procurements to ensure fair pricing.
What are the potential long-term risks associated with relying on a single supplier for critical aircraft spares, especially if the supplier's pricing escalates over time?
The primary long-term risk is vendor lock-in and escalating costs. Without competitive pressure, Lockheed Martin could increase prices significantly over the contract's duration, leading to budget overruns. This also limits the DoD's flexibility to seek alternative, potentially more cost-effective suppliers in the future, impacting readiness and resource allocation.
How does this sole-source award align with the Department of Defense's stated goals for promoting competition and achieving best value in its procurements?
Sole-source awards generally run counter to the DoD's stated goals of maximizing competition to achieve best value. While exceptions exist for valid reasons, frequent or poorly justified sole-source contracts can undermine these objectives. This specific award warrants scrutiny to ensure it was an anomaly driven by necessity rather than a deviation from best practices in procurement.
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: $69,112,164
Exercised Options: $69,112,164
Current Obligation: $69,112,164
Subaward Activity
Number of Subawards: 70
Total Subaward Amount: $11,289,073
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862516D6458
IDV Type: IDC
Timeline
Start Date: 2018-08-13
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 00:00:00
Last Modified: 2025-03-20
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