DoD Awards $97.4M Delivery Order to Lockheed Martin for F-35B Durability Testing

Contract Overview

Contract Amount: $97,365,546 ($97.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-10-25

End Date: 2033-09-30

Contract Duration: 5,089 days

Daily Burn Rate: $19.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: F-35B DURABILITY TESTING TO INCLUDE TEST ARTICLE CONFIGURATION AND PRODUCTION, TEST PLAN, TESTING ITSELF, TEARDOWN AND ANALYSIS.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $97.4 million to LOCKHEED MARTIN CORPORATION for work described as: F-35B DURABILITY TESTING TO INCLUDE TEST ARTICLE CONFIGURATION AND PRODUCTION, TEST PLAN, TESTING ITSELF, TEARDOWN AND ANALYSIS. Key points: 1. Significant investment in ensuring the long-term operational readiness of the F-35B variant. 2. Focus on comprehensive testing from configuration to analysis highlights a commitment to quality. 3. Potential for cost overruns exists given the Cost Plus Incentive Fee contract type. 4. The aerospace and defense sector benefits from continued high-value contracts for advanced aircraft programs.

Value Assessment

Rating: fair

The contract is a Cost Plus Incentive Fee type, which can lead to costs exceeding initial estimates if performance targets are not met efficiently. Benchmarking against similar complex testing contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to the specialized nature of F-35 program sustainment and testing, which Lockheed Martin is uniquely positioned to perform. The lack of competition may limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayer funds are allocated for critical testing to ensure the F-35B's reliability, but the absence of competition raises concerns about cost-effectiveness.

Public Impact

Ensures the operational readiness and safety of a key military asset. Supports advanced technological development and sustainment within the defense industry. Contributes to the long-term viability and effectiveness of the F-35 program for allied nations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract.
Cost Plus Incentive Fee contract type introduces cost risk.
Long contract duration (over 13 years) increases exposure to potential cost escalations.

Positive Signals

Focus on comprehensive durability testing ensures program effectiveness.
Investment in critical defense technology.
Potential for performance improvements driving cost efficiencies for the government.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a high-value segment of the aerospace and defense industry. Spending in this area is driven by national security needs and technological advancement, with significant R&D and production costs.

Small Business Impact

This contract does not appear to directly involve small businesses as prime contractors. Subcontracting opportunities may exist, but are not detailed in the provided data.

Oversight & Accountability

The Department of the Navy, as the acquiring agency, is responsible for oversight. The long duration and complex nature of the testing necessitate robust monitoring to ensure adherence to the contract terms and effective use of funds.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition.
Cost Plus Incentive Fee contract type.
Potential for scope creep in testing parameters.
Long-term contract duration increases exposure to economic fluctuations.
Dependency on a single contractor for critical sustainment testing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.4 million to LOCKHEED MARTIN CORPORATION. F-35B DURABILITY TESTING TO INCLUDE TEST ARTICLE CONFIGURATION AND PRODUCTION, TEST PLAN, TESTING ITSELF, TEARDOWN AND ANALYSIS.

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 $97.4 million.

What is the period of performance?

Start: 2019-10-25. End: 2033-09-30.

What specific performance metrics are tied to the incentive fee, and how will they be measured to ensure value for money?

The specific performance metrics tied to the incentive fee are not detailed in this award notice. Typically, these could relate to achieving specific durability milestones, completing testing within certain timeframes, or meeting defined reliability standards. Robust measurement and verification processes by the Department of the Navy are crucial to ensure these incentives drive genuine value and prevent cost overruns without corresponding performance gains.

Given the sole-source nature, what steps are being taken to mitigate the risk of inflated pricing and ensure fair market value?

While the contract is sole-source, the government likely employs various cost analysis techniques, including reviewing historical pricing, comparing to similar government contracts, and potentially engaging independent cost estimators. The Cost Plus Incentive Fee structure itself aims to align contractor and government interests by rewarding efficiency, but continuous oversight and negotiation are vital to mitigate pricing risks inherent in non-competed awards.

How will the results of this extensive durability testing directly translate into improved operational effectiveness or reduced lifecycle costs for the F-35B fleet?

The durability testing is designed to identify potential failure points, assess component lifespan under stress, and validate design improvements. Findings will inform maintenance schedules, upgrade requirements, and potential design modifications, ultimately aiming to enhance the F-35B's reliability in the field, reduce unscheduled maintenance, and lower the total cost of ownership over its operational life.

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 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: $157,579,886

Exercised Options: $157,579,886

Current Obligation: $97,365,546

Actual Outlays: $704,216

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001919G0008

IDV Type: BOA

Timeline