DoD Awards $438M Lockheed Martin Contract for Aircraft Manufacturing, Lacking Competition
Contract Overview
Contract Amount: $438,010,264 ($438.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2017-11-09
End Date: 2025-07-31
Contract Duration: 2,821 days
Daily Burn Rate: $155.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF DCA AND SDB II PHASE II
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76101
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $438.0 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF DCA AND SDB II PHASE II Key points: 1. Significant contract value of $438 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract is for aircraft manufacturing, a critical defense sector. 4. Long duration of 2821 days suggests a substantial, ongoing requirement.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. Without competitive bidding, it's difficult to benchmark pricing against similar contracts to ensure value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The absence of competition for a large contract like this means taxpayers may be paying a premium, as the government did not explore potentially more cost-effective options.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The long-term nature of the contract could lock the government into a specific vendor, limiting future flexibility. Dependence on a single contractor for critical aircraft manufacturing could pose a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- No small business participation indicated
- Long contract duration
Positive Signals
- Awarded to a major defense contractor with established capabilities
- Supports critical aircraft manufacturing needs
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, which is a significant part of the Department of Defense's spending. Benchmarks for similar sole-source aircraft manufacturing contracts are difficult to establish without competitive data, but large sole-source awards often warrant close scrutiny.
Small Business Impact
The data indicates that small business participation (sb) is false (false). This suggests that small businesses were not involved in this large sole-source contract, potentially missing opportunities for economic development and diverse supplier engagement.
Oversight & Accountability
The sole-source nature of this large contract warrants robust oversight to ensure cost reasonableness and performance. The Department of Defense should actively monitor expenditures and deliverables to mitigate risks associated with non-competitive awards.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition
- Cost Plus Fixed Fee contract type can lead to cost overruns
- No indication of small business participation
- Long contract duration may reduce flexibility
- Potential for reduced innovation due to lack of competition
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 $438.0 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF DCA AND SDB II PHASE II
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 $438.0 million.
What is the period of performance?
Start: 2017-11-09. End: 2025-07-31.
What justification was provided for the sole-source award, and how does it align with FAR regulations for non-competitive procurements?
The justification for a sole-source award is critical for understanding why competition was bypassed. FAR Part 6 outlines specific circumstances under which non-competitive procurements are permissible, such as when only one responsible source exists or for urgent and compelling reasons. A thorough review of the justification document is necessary to assess its validity and ensure it meets the stringent requirements for sole-source contracting, thereby safeguarding taxpayer funds.
What mechanisms are in place to ensure cost control and value for money given the Cost Plus Fixed Fee (CPFF) contract type and lack of competition?
With a CPFF contract and no competition, cost control relies heavily on stringent government oversight. This includes detailed audits of contractor costs, regular performance reviews, and potentially establishing target costs with incentive fees. The government must actively manage the contract to ensure the fixed fee remains appropriate and that costs incurred are reasonable and allocable to the contract's objectives, preventing potential cost overruns.
What is the long-term strategy for aircraft manufacturing requirements, and will future procurements be competed to ensure better value?
The long-term strategy for aircraft manufacturing needs to be assessed to determine if this sole-source award is a temporary measure or indicative of a broader trend. Future planning should prioritize competitive solicitations whenever feasible to leverage market forces for cost savings and innovation. Agencies should clearly articulate the rationale for any continued non-competitive awards and outline a path towards increased competition where possible.
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
Address: 1 LOCKHEED BLVD BLDG 10, 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: $483,883,551
Exercised Options: $483,383,551
Current Obligation: $438,010,264
Actual Outlays: $17,013,763
Subaward Activity
Number of Subawards: 117
Total Subaward Amount: $192,973,825
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-11-09
Current End Date: 2025-07-31
Potential End Date: 2025-07-31 00:00:00
Last Modified: 2025-01-10
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