DoD Awards $351.8M LRIP 12 AME to Lockheed Martin for Aircraft Manufacturing

Contract Overview

Contract Amount: $351,785,611 ($351.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-08-09

End Date: 2022-06-30

Contract Duration: 1,421 days

Daily Burn Rate: $247.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LRIP 12 AME - FMS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $351.8 million to LOCKHEED MARTIN CORPORATION for work described as: LRIP 12 AME - FMS Key points: 1. Significant contract value for low-rate initial production. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for cost overruns given Cost Plus Fixed Fee structure. 4. Aircraft Manufacturing sector is critical for national defense.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed closely. Benchmarking against similar LRIP contracts for aircraft manufacturing is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for this substantial contract may result in taxpayers paying more than if multiple vendors had vied for the work.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long duration of the contract (1421 days) increases exposure to cost fluctuations. Dependence on a single supplier for critical aircraft components poses a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration
Lack of competition

Positive Signals

Award to incumbent contractor
Supports critical defense capabilities

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a key component of the defense industrial base. Spending in this sector is often characterized by high R&D costs and long production cycles.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as both 'ss' and 'sb' are false. This represents a missed opportunity for small business participation in defense contracting.

Oversight & Accountability

Oversight is crucial for CPFF contracts to ensure costs are reasonable and allocable. The Defense Contract Management Agency (DCMA) is responsible for monitoring this contract's performance and costs.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Cost Plus Fixed Fee structure
Potential for cost overruns
Long contract duration
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $351.8 million to LOCKHEED MARTIN CORPORATION. LRIP 12 AME - FMS

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 $351.8 million.

What is the period of performance?

Start: 2018-08-09. End: 2022-06-30.

What is the estimated cost savings that could have been achieved through a competitive bidding process for this contract?

Quantifying exact savings from a sole-source award is challenging without a competitive baseline. However, historical data suggests competitive procurements can yield savings ranging from 10-30% compared to sole-source awards, depending on market dynamics and the complexity of the item being procured.

What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) structure in this context?

The CPFF structure shifts some cost risk to the government. If Lockheed Martin's costs exceed estimates, the government is obligated to pay them, plus a fixed fee. This can incentivize less cost-consciousness from the contractor if oversight is not rigorous.

How does this contract contribute to the overall effectiveness and readiness of the Department of Defense's aircraft capabilities?

This contract supports the Low-Rate Initial Production (LRIP) of a specific aircraft system (AME), which is crucial for fielding new or upgraded platforms. Successful execution ensures the DoD receives necessary assets to maintain operational readiness and technological advantage.

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 FIXED FEE (U)

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: $352,174,685

Exercised Options: $352,174,685

Current Obligation: $351,785,611

Actual Outlays: $71,227,772

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $30,646,973

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001914G0020

IDV Type: BOA

Timeline