DoD Awards $1.14B Contract to Lockheed Martin for MH-60S Aircraft Equipment

Contract Overview

Contract Amount: $113,879,262 ($113.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2005-08-29

End Date: 2009-10-31

Contract Duration: 1,524 days

Daily Burn Rate: $74.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: 200511!394048!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0076 !A!N! !N! ! !20050829!20070201!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000015654258!N!N!000050738748!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A1C!OTHER AIRCRAFT EQUIPMENT !282 !MH-60S !541330!A!A!3! ! ! ! ! !20200930!B! ! !A! !D!U!S!1!001!N!1A!Z!N!Z! ! !N!C!N! ! ! !A!A!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 $113.9 million to LOCKHEED MARTIN CORPORATION for work described as: 200511!394048!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0076 !A!N! !N! ! !20050829!20070201!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOG… Key points: 1. Significant award for MH-60S aircraft components, impacting naval aviation readiness. 2. Lockheed Martin, a major defense contractor, secured this large contract. 3. The contract's 'Not Competed' status raises questions about price discovery and competition. 4. Spending is concentrated in the Defense sector, specifically aircraft equipment.

Value Assessment

Rating: questionable

The contract value of $1.14 billion is substantial. Without competitive bidding, it's difficult to assess if this represents fair market value compared to similar contracts for aircraft equipment. Benchmarking is challenging due to the lack of competition.

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 limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for this aircraft equipment, as there was no market pressure to drive down prices.

Public Impact

Impacts the operational readiness of naval aviation fleets relying on MH-60S helicopters. Supports jobs and economic activity within Lockheed Martin's supply chain. Highlights potential for increased defense spending on specialized aircraft components.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Supports critical naval aviation assets
Award to established prime contractor

Sector Analysis

This contract falls within the Defense sector, specifically for aircraft equipment. Defense spending on R&D and manufacturing for specialized aviation components is a significant portion of the federal budget.

Small Business Impact

There is no indication in the provided data whether small businesses were involved as subcontractors. Sole-source contracts often bypass the opportunities for small business participation that competitive bidding can provide.

Oversight & Accountability

The 'Not Competed' designation warrants further oversight to ensure the justification for sole-source procurement was robust and that the pricing is reasonable. Accountability for taxpayer funds is paramount in such awards.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated costs
Limited transparency in price negotiation
Risk of vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $113.9 million to LOCKHEED MARTIN CORPORATION. 200511!394048!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905C0076 !A!N! !N! ! !20050829!20070201!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000015654258!N!N!000050738748!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A1C!OTHER AIRCRAFT EQUIPMENT !282 !MH-60S !541330!A!A!3! ! ! ! ! !202

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 $113.9 million.

What is the period of performance?

Start: 2005-08-29. End: 2009-10-31.

What was the specific justification for awarding this contract on a sole-source basis to Lockheed Martin, and were alternative solutions considered?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent needs, or the unavailability of other sources. Without access to the contract's justification documentation, it's impossible to determine the specific reasons. However, the government should have thoroughly explored all viable alternatives to ensure the most cost-effective solution was chosen, especially for a contract of this magnitude.

How does the pricing of this contract compare to industry benchmarks for similar aircraft equipment, given the lack of competition?

Benchmarking pricing for this contract is challenging due to its sole-source nature. Without competitive bids, there's no direct market comparison. The government relies on internal cost analysis and negotiation to ensure fair pricing. However, the absence of competition inherently reduces the downward pressure on prices, potentially leading to costs above what a competitive environment might yield.

What is the long-term impact of this sole-source award on the government's ability to procure similar aircraft equipment in the future?

Sole-source awards can set a precedent and potentially reduce future competition if not carefully managed. If Lockheed Martin is the only provider of this specific equipment or technology, the government may be locked into future sole-source contracts. This underscores the importance of strategic sourcing and fostering competition where feasible to ensure long-term cost savings and access to innovation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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 NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1801 STATE ROUTE 17C, OWEGO, NY, 13827

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline