Navy Awards $835M for MH-60S Aircraft Parts, Lockheed Martin Dominates
Contract Overview
Contract Amount: $43,508,767 ($43.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2005-10-26
End Date: 2011-12-30
Contract Duration: 2,256 days
Daily Burn Rate: $19.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: 200603!144019!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0048 !A!N! !N! ! !20051026!20100331!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000008455096!N!N!000076593533!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1A!AIRFRAMES AND SPARES !282 !MH-60S !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!V!1!001!N!1A!A!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! !Y!1700!N00019!0001! !
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $43.5 million to LOCKHEED MARTIN CORPORATION for work described as: 200603!144019!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0048 !A!N! !N! ! !20051026!20100331!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOG… Key points: 1. Significant contract value of $835 million awarded for aircraft parts. 2. Lockheed Martin Corporation is the sole awardee, indicating a lack of competition. 3. The contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing', a critical defense sector. 4. Potential for higher costs due to sole-source award and Cost Plus Incentive Fee structure.
Value Assessment
Rating: questionable
The contract value of $835 million for aircraft parts is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess pricing. However, the sole-source nature and fee structure raise concerns about potential overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and competition, potentially leading to less favorable terms for the government.
Taxpayer Impact: The lack of competition and the contract type may result in taxpayers paying more than necessary for these aircraft parts.
Public Impact
Essential components for MH-60S helicopters, crucial for naval operations. Sustains a significant portion of Lockheed Martin's supply chain and workforce. Impacts readiness and operational capabilities of naval aviation units. Potential for long-term reliance on a single supplier for critical parts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Incentive Fee can incentivize higher costs.
- Long contract duration (over 6 years) increases risk of cost escalation.
- Lack of small business participation noted.
Positive Signals
- Addresses a critical need for MH-60S aircraft parts.
- Awarded to a known and experienced defense contractor.
- Contract includes performance incentives.
Sector Analysis
This contract falls within the Defense sector, specifically for aircraft parts manufacturing. Spending in this area is critical for maintaining military readiness. Benchmarks are difficult without specific part details, but large sole-source awards warrant scrutiny.
Small Business Impact
The data indicates no specific mention of small business participation in this large, sole-source contract. This suggests that opportunities for small businesses may have been overlooked or were not a consideration in the award process.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential cost overruns. The contracting agency should have robust mechanisms in place to monitor performance and costs throughout the contract's lifecycle.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of competition
- Potential for cost overruns
- No clear small business participation
- Long contract duration
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ny, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.5 million to LOCKHEED MARTIN CORPORATION. 200603!144019!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0048 !A!N! !N! ! !20051026!20100331!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000008455096!N!N!000076593533!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1A!AIRFRAMES AND SPARES !282 !MH-60S !336413!E! !3! ! ! ! ! !999
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $43.5 million.
What is the period of performance?
Start: 2005-10-26. End: 2011-12-30.
What is the justification for the sole-source award, and were alternative solutions explored?
The justification for a sole-source award typically involves unique capabilities or circumstances where only one source can fulfill the requirement. Without specific documentation, it's unclear if alternatives were thoroughly explored. Agencies must demonstrate that full and open competition was not feasible or would not be in the government's best interest.
How will the Cost Plus Incentive Fee structure be managed to ensure cost control?
Managing a Cost Plus Incentive Fee (CPIF) contract requires clear performance metrics and target costs. The government must actively monitor expenditures and performance against these targets. Incentive fee clauses should be structured to reward efficiency and cost savings, not just meeting minimum requirements, to mitigate the risk of inflated costs.
What is the long-term strategy for ensuring a competitive supply chain for these critical aircraft parts?
A long-term strategy should involve market research to identify potential alternative suppliers and encourage new entrants. Breaking down the requirement into smaller, more competitive solicitations or developing second-source capabilities could foster competition and reduce reliance on a single vendor over time.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1801 STATE ROUTE 17C, OWEGO, NY, 13827
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2005-10-26
Current End Date: 2011-12-30
Potential End Date: 2011-12-30 00:00:00
Last Modified: 2024-05-06
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