Lockheed Martin awarded $1.7B F-22 Visual Displays System contract by Air Force

Contract Overview

Contract Amount: $17,061,329 ($17.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-06-29

End Date: 2025-12-31

Contract Duration: 1,281 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-22 VISUAL DISPLAYS SYSTEM (VDS)

Place of Performance

Location: EDWARDS, KERN County, CALIFORNIA, 93524

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to LOCKHEED MARTIN CORPORATION for work described as: F-22 VISUAL DISPLAYS SYSTEM (VDS) Key points: 1. Contract value of $1.7 billion over its period of performance. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The contract is a definitive contract type, indicating a firm agreement. 4. The firm fixed price contract type aims to control costs for the government. 5. The contract duration is over 3 years, from June 2022 to December 2025. 6. The contractor, Lockheed Martin Corporation, is a major defense contractor. 7. The contract is for the F-22 Visual Displays System (VDS).

Value Assessment

Rating: fair

Benchmarking the value of this $1.7 billion contract for the F-22 Visual Displays System is challenging without specific performance metrics or detailed cost breakdowns. However, given the specialized nature of avionics and display systems for advanced fighter jets like the F-22, costs can be expected to be high due to research, development, and stringent quality requirements. Comparing this to other complex avionics procurements would be necessary for a more precise value assessment. The firm fixed price structure suggests an attempt to cap costs, but the overall value is contingent on the system's effectiveness and longevity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bids suggests a moderate level of competition for this specialized system. While full and open competition is generally favorable for price discovery, the complexity and niche market for F-22 components might limit the number of capable bidders. The final price reflects the outcome of this competitive process among the participating firms.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally benefits taxpayers by encouraging competitive pricing and potentially leading to better value compared to sole-source awards. It ensures that the government explores available options before committing significant funds.

Public Impact

The primary beneficiaries are the U.S. Air Force and the F-22 Raptor fighter jet program, ensuring the continued operational capability of these aircraft. The contract delivers critical visual display systems essential for pilot situational awareness and aircraft control. The geographic impact is primarily within the United States, supporting defense operations and potentially involving facilities in California where the contractor is based. Workforce implications include employment for engineers, technicians, and manufacturing personnel involved in the production and integration of these advanced display systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise in the specialized display technology.
Dependence on a single prime contractor, Lockheed Martin, for critical F-22 components.
Risk of obsolescence if display technology rapidly advances beyond the capabilities of the contracted system.
Limited competition may result in less aggressive pricing than in broader technology markets.

Positive Signals

Firm fixed price contract type helps mitigate cost escalation risks for the government.
Awarded under full and open competition, indicating a structured procurement process.
The F-22 is a mature platform, suggesting that the display system requirements are well-defined.
Lockheed Martin's extensive experience with the F-22 program provides a strong track record for successful execution.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Procurements for advanced military platforms like the F-22 involve highly specialized components, such as visual display systems. The market for such systems is concentrated among a few key defense contractors. Spending in this area is driven by national security requirements and technological superiority, with contracts often being multi-year and high-value. Comparable spending benchmarks would typically involve other major avionics or display system contracts for advanced military aircraft.

Small Business Impact

This contract does not indicate any specific small business set-aside provisions (ss: false, sb: false). As a large-scale, specialized defense procurement, the primary contract is awarded to a major defense contractor. However, Lockheed Martin, like most large defense firms, is likely to engage subcontractors, which may include small businesses, to fulfill various aspects of the contract. The extent of small business subcontracting would need further investigation to assess its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense. Mechanisms likely include contract performance reviews, milestone tracking, and quality assurance inspections. Transparency is typically managed through contract reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

F-22 Raptor Program
Avionics Systems Procurement
Defense Visual Display Technology
Air Force Aircraft Modernization

Risk Flags

Potential for technological obsolescence
High cost of specialized defense components
Dependence on a single prime contractor
Limited competition in niche defense markets

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to LOCKHEED MARTIN CORPORATION. F-22 VISUAL DISPLAYS SYSTEM (VDS)

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 $17.1 million.

What is the period of performance?

Start: 2022-06-29. End: 2025-12-31.

What is Lockheed Martin's track record with F-22 avionics and display systems?

Lockheed Martin Corporation is the prime contractor for the F-22 Raptor program and has a long-standing track record of developing, integrating, and supporting its complex systems, including avionics and cockpit displays. Their experience spans the entire lifecycle of the F-22, from initial design and production through sustainment and upgrades. This deep familiarity with the F-22 platform suggests a high likelihood of successful delivery for the Visual Displays System (VDS). Past performance on similar F-22 avionics contracts would be a key indicator of their capability and reliability in executing this specific award.

How does the $1.7 billion contract value compare to similar avionics procurements?

The $1.7 billion value for the F-22 Visual Displays System (VDS) is substantial, reflecting the advanced technology and critical nature of display systems for a 5th-generation fighter jet. Direct comparisons are difficult without knowing the exact scope and technological sophistication of the VDS. However, major avionics suite procurements for advanced military aircraft can range from hundreds of millions to several billion dollars over their lifecycle. For context, upgrades to display systems on other advanced platforms or the initial development of similar systems for new aircraft could fall within a similar cost bracket. The firm fixed price nature of this contract aims to provide cost certainty, but the overall value is benchmarked against the specialized capabilities delivered.

What are the primary risks associated with this contract?

Key risks for this contract include technological obsolescence, as display technology evolves rapidly, potentially making the F-22's systems outdated sooner than anticipated. There's also the risk of performance issues or integration challenges with the F-22's existing avionics architecture, given the complexity of the platform. Dependence on Lockheed Martin as the sole provider for this specific VDS could pose a risk if they encounter production delays or quality control issues. Furthermore, while the contract is firm fixed price, unforeseen technical difficulties during development or sustainment could still lead to cost pressures or schedule slips, impacting the overall value proposition.

How effective is the firm fixed price contract type in managing costs for this VDS?

The firm fixed price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks are understood, as is often the case with sustainment and upgrade contracts for mature platforms like the F-22. For the Visual Displays System (VDS), FFP shifts the risk of cost overruns to the contractor, Lockheed Martin. This incentivizes the contractor to control costs and improve efficiency to maximize profit. However, if unforeseen technical challenges or scope creep occur, the contractor may seek change orders, potentially increasing the total cost. The effectiveness also depends on the initial pricing strategy and the government's ability to monitor performance and enforce contract terms.

What are the historical spending patterns for F-22 avionics and display systems?

Historical spending on F-22 avionics and display systems has been significant, reflecting the aircraft's advanced technological requirements and its long service life. The F-22 program, from its inception, involved substantial investment in cutting-edge avionics, including sophisticated cockpit displays, sensor fusion, and electronic warfare systems. Annual spending on sustainment, upgrades, and modernization of these systems has continued throughout the F-22's operational history. This $1.7 billion contract for the VDS represents a specific, large-scale investment within the broader context of ongoing F-22 sustainment and modernization efforts, aiming to maintain the aircraft's technological edge.

What is the significance of 'Audio and Video Equipment Manufacturing' (NAICS 334310) for this defense contract?

The NAICS code 334310, 'Audio and Video Equipment Manufacturing,' is somewhat broad for a highly specialized defense system like the F-22 Visual Displays System (VDS). While display systems inherently involve video output, this code typically covers consumer electronics and commercial audio/video gear. For a defense application, the manufacturing likely involves highly customized, ruggedized, and technologically advanced components that go far beyond standard commercial products. The classification might reflect the core manufacturing process of display panels or related video processing hardware, but the overall system integration, software, and specialized requirements place it firmly within the defense sector's unique procurement landscape.

Industry Classification

NAICS: Manufacturing › Audio and Video Equipment Manufacturing › Audio and Video Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: FA930222R0005

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1 LOCKHEED BLVD BLDG 10, FORT WORTH, TX, 76108

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: $25,538,982

Exercised Options: $17,061,329

Current Obligation: $17,061,329

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline