Lockheed Martin awarded $129M for Outer Wing Kits, a sole-source contract with a 1068-day duration

Contract Overview

Contract Amount: $129,259,000 ($129.3M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2008-08-26

End Date: 2011-07-30

Contract Duration: 1,068 days

Daily Burn Rate: $121.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OUTER WING KIT

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $129.3 million to LOCKHEED MARTIN CORP for work described as: OUTER WING KIT Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract was not competed, raising questions about potential price efficiencies. 3. A long duration of over 1000 days suggests a significant, ongoing requirement. 4. The awardee, Lockheed Martin, is a major defense contractor with extensive experience. 5. The contract falls under the 'Other Aircraft Parts' manufacturing NAICS code. 6. The contract was awarded by the Department of Defense, a primary federal spender.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar specialized aircraft components. The firm-fixed-price structure provides some cost certainty, but the lack of competition prevents a direct comparison of pricing against market alternatives. The total award amount of $129.26 million over approximately three years suggests a substantial investment in critical aircraft components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or proprietary rights to fulfill the requirement. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust oversight to ensure fair pricing and value.

Public Impact

The primary beneficiaries are likely military aviation units requiring these specific outer wing kits for their aircraft. The services delivered involve the manufacturing and supply of critical aircraft components. The geographic impact is primarily associated with the contractor's manufacturing facilities, likely in Georgia. Workforce implications include skilled labor in aerospace manufacturing at the contractor's site.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in suboptimal pricing.
Sole-source nature requires careful justification and oversight to ensure fair value.
Long contract duration could be subject to cost overruns if not managed effectively.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awardee is a well-established defense contractor with proven capabilities.
Contract addresses a specific, likely critical, component for military aircraft.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Large defense contractors like Lockheed Martin dominate this space, often securing sole-source or limited-competition contracts for unique or proprietary systems. Comparable spending benchmarks would typically involve other major defense procurement contracts for aircraft sub-assemblies.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the awardee being Lockheed Martin. There is no explicit information regarding subcontracting plans for small businesses. The absence of a set-aside suggests that the primary focus was on securing the specialized capabilities of the large prime contractor, potentially limiting direct opportunities for small businesses in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures would include performance monitoring against the firm-fixed-price terms and delivery schedules. Transparency is generally limited for sole-source defense contracts, but reporting requirements would still apply. Inspector General jurisdiction would be relevant in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Aerospace Components
Lockheed Martin Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration increases risk of cost escalation.
Lack of specific aircraft details limits performance context.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $129.3 million to LOCKHEED MARTIN CORP. OUTER WING KIT

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 $129.3 million.

What is the period of performance?

Start: 2008-08-26. End: 2011-07-30.

What is the specific type of aircraft for which these outer wing kits are intended?

The provided data does not specify the exact aircraft model for which these outer wing kits are intended. However, given the awardee (Lockheed Martin) and the Department of Defense as the agency, it is highly probable that these kits are for a military aircraft platform. Lockheed Martin is a major manufacturer of various military aircraft, including fighter jets, transport planes, and helicopters. Further investigation into contract details or defense procurement databases would be necessary to identify the specific platform.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when a product or service is available only from a single responsible source. For specialized aerospace components like outer wing kits, this could be due to proprietary designs, unique manufacturing processes, or specific integration requirements with an existing platform that only the original equipment manufacturer or a designated supplier can meet. The government would have likely conducted a Justification and Approval (J&A) process to document the necessity of a sole-source award, citing factors such as technical expertise, existing tooling, or the prohibitive cost and time required to develop an alternative source.

How does the $129.26 million contract value compare to historical spending on similar aircraft components?

Direct comparison of this $129.26 million contract value to historical spending on 'similar' aircraft components is difficult without more specific details on the type of wing kit and the aircraft platform. However, as a sole-source award to a major defense contractor for a significant sub-assembly, this amount is not unusual within the context of large-scale military aircraft sustainment or production programs. Historical data for major airframe components or sub-assemblies from prime defense contractors often run into tens or hundreds of millions of dollars, especially when considering multi-year procurements.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with a sole-source contract of this magnitude ($129.26M) and duration (1068 days) include potential overpricing due to the lack of competition, and contractor performance issues that could lead to delays or quality problems without readily available alternatives. There's also a risk of vendor lock-in, making it difficult to switch suppliers in the future. Effective government oversight, including rigorous cost analysis, performance monitoring, and adherence to contract milestones, is crucial to mitigate these risks.

What is Lockheed Martin's track record with similar sole-source contracts for aircraft components?

Lockheed Martin, as one of the largest defense contractors globally, has an extensive history of receiving sole-source and limited-competition contracts for various aircraft components and systems. Their track record typically involves complex, high-value procurements for major platforms. While specific data on all past sole-source awards for wing kits isn't provided here, their overall performance history with the DoD is generally characterized by the ability to deliver sophisticated military hardware, though like any large contractor, they have faced scrutiny over costs and timelines on specific programs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001908R0061

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 86 SOUTH COBB DR, MARIETTA, GA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $129,259,000

Exercised Options: $129,259,000

Current Obligation: $129,259,000

Contract Characteristics

Cost or Pricing Data: NO

Timeline