DoD's $101.9M Lockheed Martin Spares Contract Lacks Competition, Raising Cost Concerns
Contract Overview
Contract Amount: $101,891,846 ($101.9M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2022-09-13
End Date: 2026-06-30
Contract Duration: 1,386 days
Daily Burn Rate: $73.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CY22 & CY23 SPARES AND PECULIAR SUPPORT EQUIPMENT PRE-PRICED CATALOG
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $101.9 million to LOCKHEED MARTIN CORP for work described as: CY22 & CY23 SPARES AND PECULIAR SUPPORT EQUIPMENT PRE-PRICED CATALOG Key points: 1. Significant spending on aircraft spares and support equipment. 2. Sole-source award to Lockheed Martin limits price discovery. 3. Long contract duration (2022-2026) may obscure current market rates. 4. High potential for taxpayer cost overruns due to lack of competition.
Value Assessment
Rating: questionable
The $101.9M contract value for spares and support equipment is substantial. Without competitive bidding, it's difficult to assess if the pricing is fair compared to market rates or similar government contracts for aircraft components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition prevents market forces from driving down prices and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition directly impacts taxpayers by potentially increasing the overall cost of acquiring necessary aircraft parts and support equipment.
Public Impact
Taxpayers may be overpaying for critical aircraft components. Limited visibility into the true cost-effectiveness of the awarded price. Potential for reduced readiness if parts are procured at inflated prices.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Long contract duration
- Potential for price escalation
Positive Signals
- Supports critical Air Force operations
- Established relationship with prime aircraft manufacturer
Sector Analysis
This contract falls within the aerospace and defense sector, specifically supporting aircraft manufacturing. Spending benchmarks for such specialized spares are highly variable and depend on the specific aircraft and components involved.
Small Business Impact
The data does not indicate any specific provisions or participation for small businesses in this sole-source contract. Further analysis would be needed to determine if subcontracting opportunities exist.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure pricing remains reasonable and that the government is receiving value for its investment. Transparency in cost reporting is crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on cost drivers
- Long-term dependency on a single supplier
Tags
aircraft-manufacturing, department-of-defense, ga, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $101.9 million to LOCKHEED MARTIN CORP. CY22 & CY23 SPARES AND PECULIAR SUPPORT EQUIPMENT PRE-PRICED CATALOG
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 $101.9 million.
What is the period of performance?
Start: 2022-09-13. End: 2026-06-30.
What is the justification for awarding this contract sole-source to Lockheed Martin?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the inability of other sources to meet the requirement. Without specific documentation, it's presumed that Lockheed Martin is the only entity capable of providing these specific spares and support equipment, likely due to their role as the original equipment manufacturer.
How can the Department of Defense mitigate the risk of overpaying on this sole-source contract?
The DoD can mitigate overpayment risks through rigorous price analysis, benchmarking against similar non-competed contracts, and negotiating firm fixed prices with clear escalation clauses. Independent cost estimates and thorough review of Lockheed Martin's cost proposals are essential. Exploring future competition for sustainment or alternative parts could also be considered.
What is the long-term effectiveness of relying on sole-source contracts for critical spares?
Long-term reliance on sole-source contracts for critical spares can reduce overall program effectiveness by increasing costs, limiting innovation, and potentially creating vendor lock-in. While necessary in some cases, it can stifle competition, hinder the development of alternative suppliers, and make the supply chain less resilient and more expensive over time.
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: $101,891,846
Exercised Options: $101,891,846
Current Obligation: $101,891,846
Subaward Activity
Number of Subawards: 185
Total Subaward Amount: $59,051,779
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862520D3000
IDV Type: IDC
Timeline
Start Date: 2022-09-13
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2026-01-09
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