DoD Awards $30.1B for F-35A Long Lead Funding to Lockheed Martin
Contract Overview
Contract Amount: $30,114,454,301 ($30.1B)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-11-26
End Date: 2028-06-01
Contract Duration: 3,110 days
Daily Burn Rate: $9.7M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: THE PURPOSE OF THIS MODIFICATION IS TO AWARD F-35A LRIP 15 USAF AIRCRAFT* LONG LEAD FUNDING
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $30.11 billion to LOCKHEED MARTIN CORPORATION for work described as: THE PURPOSE OF THIS MODIFICATION IS TO AWARD F-35A LRIP 15 USAF AIRCRAFT* LONG LEAD FUNDING Key points: 1. Significant investment in critical defense platform. 2. Sole-source award to incumbent prime contractor. 3. Long-term contract with substantial taxpayer exposure. 4. High-value contract within the Aircraft Manufacturing sector.
Value Assessment
Rating: questionable
The contract value is substantial, and the pricing is based on a Fixed Price Incentive (FPI) structure. Without detailed cost breakdowns and comparisons to similar F-35 production lots or alternative aircraft, assessing value for money is difficult.
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 compared to a competitive environment.
Taxpayer Impact: The $30.1 billion award represents a significant commitment of taxpayer funds for long-lead production items for the F-35A aircraft.
Public Impact
Ensures continued production of a key strategic asset for the U.S. Air Force. Supports a major defense contractor and its supply chain. Potential for cost overruns due to the FPI contract type and sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- FPI contract type can lead to cost overruns.
- Long contract duration increases risk exposure.
- Lack of transparency in pricing.
Positive Signals
- Secures critical defense capability.
- Supports established production capabilities.
- Long-term planning for aircraft sustainment.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for advanced fighter jets. Spending benchmarks for similar sole-source, long-lead production contracts for major defense platforms are typically in the billions.
Small Business Impact
While the prime contractor is Lockheed Martin, the contract likely involves numerous subcontractors, potentially including small businesses. However, the primary award is not directly to small businesses.
Oversight & Accountability
Oversight will be crucial to monitor cost performance, schedule adherence, and ensure the FPI incentives align with taxpayer interests. The Department of the Navy is the contracting activity, suggesting inter-service collaboration.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Fixed Price Incentive (FPI) contract type
- Long contract duration (through 2028)
- High dollar value
- Potential for cost overruns
- Lack of competitive bidding
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.11 billion to LOCKHEED MARTIN CORPORATION. THE PURPOSE OF THIS MODIFICATION IS TO AWARD F-35A LRIP 15 USAF AIRCRAFT* LONG LEAD FUNDING
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 $30.11 billion.
What is the period of performance?
Start: 2019-11-26. End: 2028-06-01.
What is the historical cost performance of F-35 LRIP contracts, and how does this award compare?
Historical F-35 LRIP contracts have faced scrutiny for cost overruns and schedule delays. This $30.1 billion award for LRIP 15 needs to be benchmarked against previous lots and projected costs to assess if efficiencies are being realized or if costs are escalating. Transparency in cost reporting is essential for effective oversight.
What are the specific risks associated with the Fixed Price Incentive (FPI) contract type for this long-lead funding?
The FPI structure creates a shared risk between the government and contractor. While it incentivizes cost control, it also allows for cost increases up to a ceiling. For a sole-source award like this, the government bears a significant portion of the risk if the contractor's costs exceed targets, potentially leading to higher overall expenditure than initially planned.
How does the lack of competition impact the government's ability to ensure the best value for taxpayer dollars on this F-35A procurement?
A sole-source award inherently limits the government's leverage in price negotiations. Without competing offers, it's challenging to definitively ascertain if the negotiated price represents the best possible value. The government must rely heavily on robust cost analysis and contractor negotiation to mitigate this lack of competitive pressure.
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
Solicitation ID: N0001919R0062
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $30,369,885,397
Exercised Options: $30,351,787,363
Current Obligation: $30,114,454,301
Subaward Activity
Number of Subawards: 19044
Total Subaward Amount: $15,853,316,246
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-11-26
Current End Date: 2028-06-01
Potential End Date: 2028-06-01 00:00:00
Last Modified: 2025-12-23
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