DoD's $103M Aircraft Manufacturing Contract Awarded to Lockheed Martin Corporation

Contract Overview

Contract Amount: $102,978,192 ($103.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-02-11

End Date: 2020-08-31

Contract Duration: 1,663 days

Daily Burn Rate: $61.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $103.0 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. Significant duration of the contract (1663 days) suggests a long-term need for these services. 3. The 'Aircraft Manufacturing' NAICS code indicates a focus on production rather than services. 4. Awarded by the Department of the Navy, highlighting a specific branch's procurement needs. 5. The contract type 'COST PLUS FIXED FEE' can lead to cost overruns if not managed carefully. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this $103 million contract is challenging without specific details on the aircraft manufactured or comparable procurements. The Cost Plus Fixed Fee (CPFF) contract type, while common in complex defense manufacturing, carries inherent risks of cost escalation. Without detailed performance metrics or independent cost analyses, it's difficult to definitively assess value for money. However, the substantial award amount suggests a significant undertaking, and the fixed fee component provides some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically justified when only one responsible source can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent national security needs. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the government secured the best possible price for the aircraft manufacturing services.

Public Impact

The primary beneficiaries are the Department of the Navy, which receives critical aircraft manufacturing capabilities. The contract supports the production of aircraft, essential for national defense and military operations. The geographic impact is primarily in Texas, where the contractor is located, potentially supporting local jobs and the regional economy. Workforce implications include employment for skilled labor in aircraft manufacturing, engineering, and related fields within Lockheed Martin and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can incentivize higher spending if not rigorously overseen.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns due to the nature of CPFF contracts.
No explicit mention of small business subcontracting goals.

Positive Signals

Award to a major defense contractor with established manufacturing capabilities.
Contract duration suggests a sustained and critical need for the manufactured aircraft.
Fixed fee component provides a baseline cost control mechanism.
Contract supports a key branch of the U.S. military (Department of the Navy).

Sector Analysis

The aircraft manufacturing sector is a critical component of the broader aerospace and defense industry. This contract falls under NAICS code 336411, which encompasses the manufacturing of military aircraft, space vehicles, and related parts. The defense sector is characterized by long-term, high-value contracts, often awarded through competitive bidding but also frequently through sole-source procurements for specialized systems. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve other large-scale military aircraft production contracts.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb': false. The absence of specific subcontracting plans or goals mentioned in the provided data raises concerns about the direct impact on the small business ecosystem for this particular award. While Lockheed Martin, as a large prime contractor, may engage small businesses in its supply chain, the lack of a formal set-aside or explicit subcontracting targets means opportunities for small businesses are not guaranteed or prioritized through this specific contract vehicle.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential involvement from the Defense Contract Management Agency (DCMA). Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency regarding the specific aircraft produced and the justification for the sole-source award would be key to assessing accountability. The CPFF structure necessitates robust financial oversight to manage costs effectively.

Related Government Programs

Military Aircraft Procurement
Defense Manufacturing Contracts
Department of the Navy Contracts
Lockheed Martin Contracts
Cost-Plus Contracts

Risk Flags

Sole-source award may limit cost savings.
CPFF contract type carries inherent cost overrun risk.
Lack of small business subcontracting details.
Limited transparency on specific aircraft and justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.0 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF

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 $103.0 million.

What is the period of performance?

Start: 2016-02-11. End: 2020-08-31.

What specific type of aircraft is being manufactured under this contract, and what is its intended operational role?

The provided data does not specify the exact type of aircraft being manufactured under this $103 million contract awarded to Lockheed Martin Corporation. The NAICS code 336411, 'Aircraft Manufacturing,' is broad and covers various types of aircraft, including military fixed-wing aircraft, helicopters, and related components. Without further details, it is impossible to determine the specific aircraft model or its intended operational role within the Department of the Navy's fleet. This information is crucial for understanding the strategic importance and technological sophistication of the procurement.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data indicates this contract was awarded on a 'sole-source' basis ('ct': 'NOT COMPETED'). Government contracts are typically awarded through full and open competition to ensure the best value for taxpayers. A sole-source award implies that the Department of the Navy determined that only Lockheed Martin Corporation could provide the required aircraft manufacturing services. Common justifications for sole-source awards include unique capabilities, proprietary technology, specialized expertise, or urgent national security requirements where no other source can meet the need. A detailed justification document would typically be required and publicly available, outlining the specific reasons why competition was not feasible or advantageous.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost and risk for the government?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty for the contractor's profit margin, the 'cost-plus' element means the government bears the risk of cost overruns. If the actual costs to produce the aircraft exceed initial estimates, the government pays the higher amount. This structure is often used for complex projects where cost estimation is difficult upfront. Effective oversight is critical to ensure costs are reasonable and allowable, mitigating the risk of excessive spending.

What is the historical spending pattern for aircraft manufacturing by the Department of the Navy with Lockheed Martin Corporation?

The provided data represents a single contract award of $103 million to Lockheed Martin Corporation by the Department of the Navy for aircraft manufacturing, spanning from February 2016 to August 2020. To understand historical spending patterns, one would need to analyze a broader dataset encompassing all contracts awarded by the Navy to Lockheed Martin (and other contractors) within the 'Aircraft Manufacturing' NAICS code (336411) and potentially related codes over several fiscal years. This would reveal trends in contract values, types, competition levels, and the overall volume of business between the two entities in this sector.

Are there any performance metrics or quality assurance measures associated with this contract that indicate its success?

The provided data does not include specific performance metrics, quality assurance measures, or details about the contract's success. For a contract of this nature, performance would typically be evaluated based on factors such as adherence to production schedules, meeting technical specifications and quality standards for the aircraft, delivery timelines, and overall program cost control. The Department of the Navy would have internal processes for monitoring contractor performance, and contract close-out documentation might contain performance evaluations. However, this information is not present in the given data points.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001914R0040

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

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: $126,467,772

Exercised Options: $126,467,772

Current Obligation: $102,978,192

Actual Outlays: $5,902,948

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $31,289,683

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline