Naval Air Systems Command awards $83.5M contract for aircraft component repair to Lockheed Martin

Contract Overview

Contract Amount: $25,909,956 ($25.9M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2004-10-01

End Date: 2010-10-31

Contract Duration: 2,221 days

Daily Burn Rate: $11.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200507!026707!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0005 !A!N! !N! ! !20041001!20051231!003268869!003268869!834951691!N!LOCKHEED MARTIN CORPORATION !86 SOUTH COBB DR !MARIETTA !GA!30063!00000! !PK!* !* !PAKISTAN !+000001500000!Y!N!000003000000!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1A!AIRFRAMES AND SPARES !000 !* !336412!E! !1! ! ! ! ! !20200930!B! ! !N!Z!B!U!U!1!001!N!4A!Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y!1700!N00019!0001! !

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $25.9 million to LOCKHEED MARTIN CORP for work described as: 200507!026707!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0005 !A!N! !N! ! !20041001!20051231!003268869!003268869!834951691!N!LOCKHEED MARTIN CORPORATION !86 SOUTH COBB DR !MARIETTA !GA!30063!00000! !PK!* !* … Key points: 1. Contract awarded for maintenance and repair of aircraft components and accessories. 2. Significant portion of contract value allocated to airframes and spares. 3. Long-term contract duration of over 7 years. 4. Contractor has a substantial track record with the Department of Defense. 5. Geographic impact primarily within Georgia, where the contractor is located. 6. Contract type is Cost Plus Fixed Fee, indicating potential for cost overruns.

Value Assessment

Rating: fair

The contract value of $83.5 million over approximately 7 years suggests an average annual spend of around $11.9 million. Benchmarking this against similar contracts for aircraft component repair is challenging without more specific details on the types of aircraft and components involved. However, the Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher overall costs compared to fixed-price contracts if not managed carefully, as it allows the contractor to recover costs plus a predetermined fee. Further analysis would be needed to compare the fee structure and overhead rates against industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded on a sole-source basis. This means that only one contractor, Lockheed Martin Corporation, was considered for this award. The justification for a sole-source award typically involves factors such as unique capabilities, urgent needs, or lack of adequate competition. Without a competitive bidding process, it is difficult to ascertain if the government received the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the absence of competition limits price negotiation leverage.

Public Impact

The primary beneficiary is the U.S. Navy, ensuring the operational readiness of its aircraft fleet. Services include maintenance and repair of aircraft components and accessories, crucial for flight safety and performance. The contract supports jobs and economic activity within Georgia, the location of Lockheed Martin's facility. Ensures the availability of critical spare parts for naval aviation assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure may incentivize higher costs.
Sole-source award limits price discovery and potential savings.
Long contract duration could mask inefficiencies if not closely monitored.

Positive Signals

Contract awarded to a major defense contractor with established expertise.
Focus on essential maintenance and repair ensures operational readiness.
Contract duration provides stability for planning and execution.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. This contract falls within the aircraft manufacturing and maintenance sub-sector, which is a critical component of national defense. Spending in this area is often driven by the need to maintain aging fleets and procure advanced systems. Comparable spending benchmarks would typically involve analyzing other MRO (Maintenance, Repair, and Overhaul) contracts for similar naval aviation platforms.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans being a primary focus for this specific award. As a sole-source contract awarded to a large prime contractor, the opportunities for small businesses would likely be through subcontracts awarded by Lockheed Martin. The extent of small business participation would depend on Lockheed Martin's subcontracting strategy and the availability of qualified small business suppliers for the required components and services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures would include performance reviews, audits, and adherence to the Cost Plus Fixed Fee structure. Transparency may be limited due to the sole-source nature of the award, but contract modifications and performance data are generally available through federal procurement databases.

Related Government Programs

Naval Aviation Maintenance Programs
Aircraft Component Repair Services
Defense Logistics Agency (DLA) Contracts
Airframe and Engine Spare Parts Procurement

Risk Flags

Sole-source award may limit price competition.
Cost Plus Fixed Fee contract type carries risk of cost overruns.
Lack of specific performance metrics in the provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.9 million to LOCKHEED MARTIN CORP. 200507!026707!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0005 !A!N! !N! ! !20041001!20051231!003268869!003268869!834951691!N!LOCKHEED MARTIN CORPORATION !86 SOUTH COBB DR !MARIETTA !GA!30063!00000! !PK!* !* !PAKISTAN !+000001500000!Y!N!000003000000!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1A!AIRFRAMES AND SPARES !000 !* !336412!E! !1! ! ! ! ! !202

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 $25.9 million.

What is the period of performance?

Start: 2004-10-01. End: 2010-10-31.

What is Lockheed Martin's track record with similar aircraft component repair contracts for the Navy?

Lockheed Martin Corporation is a major defense contractor with extensive experience in supporting naval aviation platforms. They have a long history of performing maintenance, repair, and overhaul (MRO) services for various aircraft, including fighter jets, helicopters, and maritime patrol aircraft. Their track record typically involves managing complex supply chains, performing intricate repairs, and ensuring the airworthiness of critical components. While specific data on past performance for this exact type of component repair contract would require deeper analysis of historical contract awards and performance reviews, Lockheed Martin is generally considered a capable provider for such services within the Department of Defense.

How does the $83.5 million contract value compare to other aircraft component repair contracts?

The $83.5 million total contract value, spread over approximately 7 years, represents an average annual obligation of roughly $11.9 million. This figure needs to be contextualized by the specific types of aircraft and components being serviced. Contracts for MRO services can vary significantly in value depending on the complexity of the systems, the volume of aircraft, and the scope of work (e.g., routine maintenance vs. major overhauls). Without knowing the specific platforms and the criticality of the components, a direct comparison is difficult. However, for a major defense contractor like Lockheed Martin supporting naval aviation, this value is within a plausible range for sustained component support.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for aircraft component repair?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government may end up paying more than necessary. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing their profit. If the contractor's costs are higher than anticipated due to inefficiencies, poor management, or unforeseen technical challenges, the government bears the burden of these increased costs. While the fixed fee provides some predictability for the contractor's profit, it does not cap the total contract price. This can lead to cost overruns if robust oversight and cost controls are not diligently applied by the contracting agency.

What is the expected effectiveness of this contract in ensuring naval aircraft readiness?

This contract is expected to be effective in ensuring naval aircraft readiness by providing essential maintenance and repair services for critical components and airframes. By outsourcing these specialized tasks to Lockheed Martin, the Navy can maintain a higher operational tempo and reduce the downtime of its aircraft. The long-term nature of the contract suggests a commitment to sustained support, which is vital for keeping complex aviation systems functional. The effectiveness will ultimately depend on the contractor's performance in meeting delivery schedules, quality standards, and turnaround times for repairs.

How has federal spending on aircraft component repair evolved over the past decade?

Federal spending on aircraft component repair has generally remained a significant and consistent expenditure within the Department of Defense budget. Over the past decade, spending has been influenced by factors such as the aging of existing aircraft fleets, the introduction of new platforms, and evolving geopolitical threats. While specific figures fluctuate annually, the overall trend indicates a sustained need for robust MRO services to maintain readiness. Factors like increased operational tempo, the complexity of modern aircraft systems, and the drive for greater efficiency have shaped spending patterns, often leading to longer-term support contracts with prime manufacturers or specialized MRO providers.

What are the implications of this contract being awarded on a sole-source basis?

Awarding this contract on a sole-source basis means that the government did not conduct a competitive bidding process. This typically occurs when only one responsible source is available or capable of meeting the requirement. The implications for taxpayers are potentially higher costs, as the absence of competition limits the government's leverage in negotiating prices and terms. It also raises questions about whether alternative solutions or more cost-effective providers were overlooked. While sole-source awards are sometimes necessary for national security or unique capabilities, they warrant careful justification and scrutiny to ensure the government is still achieving best value.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $7,777,769

Exercised Options: $4,777,769

Current Obligation: $25,909,956

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline