DoD's $15.7M Aircraft Manufacturing Contract with Lockheed Martin Raises Questions on Competition and Value
Contract Overview
Contract Amount: $15,670,608 ($15.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2005-01-14
End Date: 2010-07-31
Contract Duration: 2,024 days
Daily Burn Rate: $7.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $15.7 million to LOCKHEED MARTIN CORPORATION for work described as: Key points: 1. Significant contract value of $15.7 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Focus on aircraft manufacturing suggests a specialized, high-value sector.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a lack of competition, makes it difficult to assess value. Without benchmarks or competitive bids, it's hard to determine if $15.7 million is a fair price for the aircraft manufacturing services provided.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition and potentially inflated costs due to the contract type could result in a significant negative impact on taxpayer funds.
Public Impact
Taxpayers may be paying more than necessary due to the absence of competitive bidding. Limited opportunities for other businesses, including small businesses, to participate in this defense contract. Potential for reduced innovation in aircraft manufacturing if only one provider is engaged.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Sole-source award
Positive Signals
- Award to a known, large defense contractor
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of national defense. Spending in this sector is typically high-value and often involves complex, specialized production, making competitive sourcing crucial.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large business, and there is no indication that small businesses were involved as subcontractors. This represents a missed opportunity for small business participation in a significant defense contract.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the government received fair pricing and that the contract objectives were met efficiently. Accountability for cost management under a CPFF contract is essential.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Sole-source award
- Cost Plus Fixed Fee contract type
- Potential for inflated costs
- Limited small business participation
Tags
aircraft-manufacturing, department-of-defense, tx, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.7 million to LOCKHEED MARTIN CORPORATION. See the official description on USAspending.
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 $15.7 million.
What is the period of performance?
Start: 2005-01-14. End: 2010-07-31.
What specific aircraft manufacturing services were procured under this contract, and how was the necessity for a sole-source award justified?
The contract was for aircraft manufacturing services, identified under NAICS code 336411. A sole-source justification would typically involve unique capabilities, urgent needs, or a lack of viable alternatives. Without further documentation, the specific reasons for bypassing competition remain unclear, impacting the assessment of procurement efficiency.
Given the Cost Plus Fixed Fee structure and lack of competition, what mechanisms were in place to control costs and ensure fair pricing?
Cost Plus Fixed Fee contracts inherently carry a risk of cost escalation, especially without competitive pressure. While a fixed fee provides some incentive for the contractor, robust government oversight, detailed cost audits, and clear performance metrics are crucial to mitigate overspending and ensure fair pricing. The absence of competition weakens the primary driver for cost efficiency.
How does this contract's value and structure compare to similar aircraft manufacturing contracts awarded competitively by the Department of Defense?
Comparing this $15.7 million sole-source contract to competitively awarded contracts for similar aircraft manufacturing services would likely reveal a higher cost per unit or overall price. Competitive bidding typically drives down prices and fosters innovation, suggesting this contract may not represent the best value for taxpayer dollars.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: LOCKHEED BLVD, FORT WORTH, TX, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-01-14
Current End Date: 2010-07-31
Potential End Date: 2010-07-31 00:00:00
Last Modified: 2014-08-17
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