DoD Awards $511M Contract for ISDD Preliminary Tasks to Lockheed Martin, Facing Limited Competition
Contract Overview
Contract Amount: $511,184,211 ($511.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2012-01-31
End Date: 2025-09-30
Contract Duration: 4,991 days
Daily Burn Rate: $102.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: ISDD PRELIMINARY TASKS, FMS CONTRACT
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $511.2 million to LOCKHEED MARTIN CORPORATION for work described as: ISDD PRELIMINARY TASKS, FMS CONTRACT Key points: 1. Significant contract value of over $511 million for aircraft manufacturing. 2. Sole-source award to Lockheed Martin raises concerns about competition and potential price inflation. 3. Long contract duration (2012-2025) suggests a substantial, ongoing need. 4. The contract falls under the Aircraft Manufacturing sector, a critical area for defense spending.
Value Assessment
Rating: questionable
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed tightly. Without comparable contract data, assessing the pricing's fairness against market benchmarks is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract is not available for competition, indicating a sole-source or limited competition scenario. This lack of robust competition can hinder price discovery and potentially lead to higher costs for the government.
Taxpayer Impact: The absence of full and open competition for a contract of this magnitude may result in taxpayers paying a premium compared to a more competitive bidding process.
Public Impact
Taxpayers may be overpaying due to limited competition on a large defense contract. The long-term nature of the contract impacts budget predictability for the Department of Defense. Dependence on a single contractor for critical preliminary tasks could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Critical defense capability
- Long-term strategic partnership
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, which is a significant area of defense spending. Benchmarks for similar large-scale aircraft manufacturing contracts are often proprietary or difficult to access publicly, making direct comparison challenging.
Small Business Impact
The data indicates that small businesses were not involved in this specific contract award. Opportunities for small business subcontracting should be explored to ensure broader economic impact.
Oversight & Accountability
The contract's long duration and sole-source nature warrant close oversight from the Defense Contract Management Agency to ensure cost control and performance standards are met.
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 pressure may lead to inflated prices.
- Long contract duration could hinder technological agility.
- Sole-source award limits opportunities for other capable firms.
- Insufficient data to benchmark pricing effectively.
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $511.2 million to LOCKHEED MARTIN CORPORATION. ISDD PRELIMINARY TASKS, FMS CONTRACT
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 $511.2 million.
What is the period of performance?
Start: 2012-01-31. End: 2025-09-30.
What specific preliminary tasks are covered under this contract, and how do they contribute to the overall defense objective?
The contract is for 'ISDD PRELIMINARY TASKS, FMS CONTRACT'. ISDD likely refers to Intelligence, Surveillance, and Reconnaissance (ISR) or a similar defense system. FMS indicates Foreign Military Sales, meaning the tasks support equipping allied nations. The preliminary tasks are crucial for defining requirements, conducting feasibility studies, and initial design phases before full-scale production or deployment.
Given the limited competition, what mechanisms are in place to ensure Lockheed Martin's pricing remains fair and reasonable throughout the contract's lifecycle?
As a Cost Plus Incentive Fee (CPIF) contract, pricing is tied to performance targets. The government likely employs Earned Value Management (EVM) and regular audits to monitor costs. However, the lack of competitive bids inherently reduces leverage. The Contracting Officer's Representative (COR) and DCMA play vital roles in scrutinizing costs and ensuring adherence to contract terms.
How does the long duration and sole-source nature of this contract impact the Department of Defense's ability to adapt to evolving technological needs in aircraft manufacturing?
A long-term, sole-source contract can create vendor lock-in, potentially slowing the adoption of newer technologies if the incumbent contractor is not incentivized or capable of rapid innovation. While this contract focuses on preliminary tasks, it could set a precedent. The DoD must actively manage this relationship and explore future competitive opportunities for follow-on production or upgrades.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001909R0260
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $693,299,675
Exercised Options: $693,299,675
Current Obligation: $511,184,211
Actual Outlays: $2,190,599
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-01-31
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2023-11-15
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