DoD Awards $142.5M for MC/FMC Retrofit Parts to Lockheed Martin, Raising Oversight Concerns
Contract Overview
Contract Amount: $142,525,937 ($142.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-06-01
End Date: 2027-01-29
Contract Duration: 2,433 days
Daily Burn Rate: $58.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MC/FMC RETROFIT AND OBSOLESCENCE PARTS
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $142.5 million to LOCKHEED MARTIN CORPORATION for work described as: MC/FMC RETROFIT AND OBSOLESCENCE PARTS Key points: 1. Significant contract value for aircraft parts, primarily for the Navy. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Long contract duration (2020-2027) may not reflect current market conditions. 4. Obsolescence parts procurement suggests potential for higher costs due to limited availability.
Value Assessment
Rating: questionable
The contract value of $142.5M for retrofit and obsolescence parts is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar sole-source procurements for specialized aircraft components.
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 lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition for a large contract value raises concerns about taxpayer money being spent efficiently.
Public Impact
Taxpayers may be overpaying for critical aircraft parts due to the lack of competition. The long-term nature of the contract could lock the DoD into potentially inflated prices. Dependence on a single supplier for obsolescence parts can create supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
- Obsolescence parts
Positive Signals
- Essential for military readiness
- Firm fixed price contract
Sector Analysis
This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is critical for maintaining military aviation fleets, but sole-source awards can inflate costs compared to competitive procurements.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication that small businesses were involved as subcontractors in this specific award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this large contract warrants close oversight to ensure fair pricing and prevent potential cost overruns. Transparency in the justification for not competing the award is crucial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Potential for inflated costs due to lack of competitive pressure.
- Long contract duration may not reflect current market pricing.
- Procurement of obsolescence parts can be inherently more expensive.
- Lack of transparency regarding justification for sole-source award.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ny, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $142.5 million to LOCKHEED MARTIN CORPORATION. MC/FMC RETROFIT AND OBSOLESCENCE PARTS
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 $142.5 million.
What is the period of performance?
Start: 2020-06-01. End: 2027-01-29.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative sourcing strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this contract, the specific rationale needs to be thoroughly documented and reviewed by oversight bodies to ensure it was indeed the only viable option and that competitive alternatives were not feasible or explored.
How does the per-unit cost of these retrofit and obsolescence parts compare to market benchmarks or previous procurements of similar items?
Without access to detailed pricing data and market benchmarks for these specific obsolescence parts, a direct comparison is challenging. However, given the sole-source nature, there's a heightened risk that costs may exceed competitive market rates. A thorough cost analysis by the DoD is essential to validate the pricing's reasonableness.
What measures are in place to mitigate risks associated with procuring obsolescence parts from a single supplier over a long contract period?
Mitigation strategies could include establishing clear performance metrics, requiring Lockheed Martin to provide detailed cost breakdowns, and actively seeking alternative sources for parts as they become available. The DoD should also conduct regular reviews to assess the ongoing necessity and cost-effectiveness of the sole-source arrangement.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1801 STATE RT 17 C, OWEGO, NY, 13827
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: $144,089,392
Exercised Options: $142,525,937
Current Obligation: $142,525,937
Actual Outlays: $104,160
Subaward Activity
Number of Subawards: 83
Total Subaward Amount: $98,585,633
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001919G0029
IDV Type: BOA
Timeline
Start Date: 2020-06-01
Current End Date: 2027-01-29
Potential End Date: 2027-01-29 00:00:00
Last Modified: 2025-09-15
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