DoD's $80.6M Block 2B Upgrade Contract Awarded to Lockheed Martin Raises Questions on Competition
Contract Overview
Contract Amount: $80,558,622 ($80.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2014-11-24
End Date: 2022-09-30
Contract Duration: 2,867 days
Daily Burn Rate: $28.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: BLOCK 2B CONFIGURATION UPGRADE
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $80.6 million to LOCKHEED MARTIN CORPORATION for work described as: BLOCK 2B CONFIGURATION UPGRADE Key points: 1. The contract's significant value of $80.6 million warrants scrutiny regarding its necessity and efficiency. 2. Sole-source award to Lockheed Martin limits competitive pricing and potential innovation from other manufacturers. 3. The 'Cost Plus Incentive Fee' structure may incentivize cost overruns, posing a financial risk. 4. Focus on Aircraft Manufacturing highlights a critical defense sector where efficient spending is paramount.
Value Assessment
Rating: questionable
The $80.6 million total award is substantial. Without competitive bids, it's difficult to assess if this price reflects fair market value compared to similar aircraft component upgrade contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition limits price discovery and may lead to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayer funds are potentially being spent at a premium due to the absence of a competitive bidding process.
Public Impact
Significant taxpayer investment in a sole-source defense contract. Potential for increased costs due to lack of competition. Impact on the readiness and modernization of naval aircraft. Questions about the justification for not seeking competitive proposals.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition justification
Positive Signals
- Critical upgrade for naval aviation
- Established contractor with relevant expertise
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of national defense. Spending benchmarks in this area are often high due to specialized requirements and R&D, but competition is key to controlling costs.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no explicit information provided regarding subcontracting opportunities for small businesses on this specific award.
Oversight & Accountability
The 'NOT COMPETED' status suggests a potential lack of robust oversight in exploring competitive alternatives. Further review is needed to ensure accountability and justification for the sole-source decision.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition.
- Cost-plus contract type may incentivize overspending.
- Lack of transparency on justification for sole-sourcing.
- Significant financial outlay without clear competitive benchmark.
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $80.6 million to LOCKHEED MARTIN CORPORATION. BLOCK 2B CONFIGURATION UPGRADE
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $80.6 million.
What is the period of performance?
Start: 2014-11-24. End: 2022-09-30.
What is the justification for awarding this significant contract on a sole-source basis, and were alternative acquisition strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's unclear if the Department of the Navy thoroughly explored competitive options or if specific circumstances warranted bypassing the standard procurement process. This lack of competition directly impacts price discovery and potentially increases the overall cost to taxpayers.
How does the 'Cost Plus Incentive Fee' structure mitigate or exacerbate risks associated with cost overruns for this specific upgrade?
A Cost Plus Incentive Fee (CPIF) contract aims to control costs by establishing target costs and fee amounts, with adjustments based on performance. However, if the target cost is set too high or the incentive structure is weak, it can still lead to significant cost overruns. For this $80.6M contract, the effectiveness of the CPIF hinges on the realism of the initial cost targets and the strength of the incentives to achieve them.
What is the projected impact of this Block 2B Configuration Upgrade on the operational effectiveness and lifespan of the relevant naval aircraft?
The Block 2B Configuration Upgrade is likely intended to enhance specific functionalities, improve performance, or extend the service life of critical naval aircraft. Understanding the precise nature of the upgrade and its expected benefits is crucial for assessing its value. Without this context, it's difficult to determine if the $80.6 million investment will yield a commensurate improvement in military capability and readiness.
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
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: $80,601,797
Exercised Options: $80,601,797
Current Obligation: $80,558,622
Actual Outlays: $2,427,691
Subaward Activity
Number of Subawards: 37
Total Subaward Amount: $14,539,285
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-11-24
Current End Date: 2022-09-30
Potential End Date: 2022-09-30 00:00:00
Last Modified: 2024-05-10
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