DoD Awards $3.8B JSF Contract to Lockheed Martin for Aircraft Manufacturing

Contract Overview

Contract Amount: $3,829,164,351 ($3.8B)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2008-05-14

End Date: 2021-08-11

Contract Duration: 4,837 days

Daily Burn Rate: $791.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: JSF LRIP LOT III - AAC

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76101

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $3.83 billion to LOCKHEED MARTIN CORPORATION for work described as: JSF LRIP LOT III - AAC Key points: 1. Significant investment in advanced aircraft manufacturing. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long contract duration (4837 days) presents long-term risk. 4. Focus on Defense sector, specifically aircraft manufacturing.

Value Assessment

Rating: questionable

The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar advanced aircraft programs is difficult due to the unique nature of the JSF, but the scale suggests a high value.

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 lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this large contract raises concerns about potential overspending and the efficient use of taxpayer funds.

Public Impact

Impacts national defense capabilities through advanced aircraft. Potential for job creation in the aerospace sector. Long-term commitment of significant taxpayer resources.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of competition

Positive Signals

Acquisition of advanced military aircraft
Potential for technological advancement

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is critical for national security but requires rigorous oversight due to high costs and complex technologies.

Small Business Impact

The data indicates that small businesses were not directly involved as prime contractors in this specific award. Further analysis would be needed to determine their subcontracting roles.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency, suggesting established oversight mechanisms. However, the sole-source nature and cost-plus structure warrant close monitoring for cost control and performance.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to CPIF structure
Lack of competitive bidding
Long-term program commitment
Dependency on a single contractor
Complexity of the technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.83 billion to LOCKHEED MARTIN CORPORATION. JSF LRIP LOT III - AAC

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 $3.83 billion.

What is the period of performance?

Start: 2008-05-14. End: 2021-08-11.

What was the justification for the sole-source award, and were alternatives considered?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For complex, high-technology programs like the JSF, this might be due to unique capabilities, existing infrastructure, or critical program timelines. A thorough review of the justification documentation is necessary to assess if adequate market research was conducted and if competition was truly not feasible.

How effectively has the Cost Plus Incentive Fee structure controlled costs and incentivized performance on this contract?

The effectiveness of a CPIF contract hinges on well-defined performance metrics and realistic target costs. Without access to specific performance data and cost variance reports, it's difficult to definitively assess. However, the long duration and significant value suggest that ongoing monitoring and potential renegotiation of incentives are crucial to ensure value for money and prevent cost overruns.

What is the projected long-term cost and sustainment cost for the JSF program under this contract?

The initial contract value of $3.8 billion covers a specific lot of Low Rate Initial Production (LRIP). The total lifecycle cost of the JSF program, including sustainment, maintenance, and future upgrades, is significantly higher. Understanding the full program cost trajectory is essential for long-term budget planning and assessing the overall value proposition for the DoD.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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 (UEI: 834951691)

Address: LOCKHEED BLVD, FORT WORTH, TX, 76108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,851,730,368

Exercised Options: $3,851,730,368

Current Obligation: $3,829,164,351

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline