DoD awards $33.8M contract to Lockheed Martin for aircraft manufacturing in Texas

Contract Overview

Contract Amount: $33,780,836 ($33.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-05-28

End Date: 2027-05-31

Contract Duration: 2,194 days

Daily Burn Rate: $15.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: POLAND INTEGRATION CONTRACT

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76101

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $33.8 million to LOCKHEED MARTIN CORPORATION for work described as: POLAND INTEGRATION CONTRACT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract duration of approximately 6 years suggests a long-term commitment to this specific aircraft manufacturing need. 3. Sole-source award raises questions about potential lack of competition and its impact on pricing. 4. The contract is for aircraft manufacturing, a critical component of defense capabilities. 5. The awardee, Lockheed Martin, is a major defense contractor with extensive experience in this sector.

Value Assessment

Rating: fair

The contract's cost-plus-fixed-fee structure necessitates close monitoring to ensure value for money. Without a competitive bidding process, it's difficult to benchmark the pricing against market rates. The total award amount of $33.8 million over approximately six years suggests a significant investment, but the value proposition is contingent on effective cost control and delivery of required capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down costs.

Public Impact

The primary beneficiary is the Department of Defense, which will receive manufactured aircraft essential for its operations. The services delivered include the manufacturing of aircraft, contributing to national defense readiness. The contract has a geographic impact primarily in Texas, where the manufacturing is likely to take place. This contract supports jobs within the aerospace manufacturing sector, particularly in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing.
Cost-plus-fixed-fee contracts can incentivize higher spending if not rigorously managed.
Long contract duration increases exposure to potential cost escalations.

Positive Signals

Award to a prime contractor with proven experience in aircraft manufacturing.
Contract supports critical defense capabilities.
Clear performance period defined.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. This contract falls within the defense sub-sector, focusing on aircraft production. Comparable spending benchmarks are difficult to establish without knowing the specific aircraft type, but major defense platforms often involve multi-billion dollar contracts over many years. This $33.8 million award appears to be for a specific component or a smaller production run within the broader defense aircraft market.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This suggests that opportunities for small businesses may be limited to direct subcontracting by Lockheed Martin, rather than a specific mandate within the contract itself.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures will be tied to the cost-plus-fixed-fee structure, requiring detailed reporting and auditing of costs incurred. Transparency may be limited due to the sole-source nature of the award, but contract performance and financial data should be available through federal procurement databases.

Related Government Programs

Aircraft Procurement, Navy
Defense Production Act Investments
Aerospace Manufacturing Contracts
Department of Defense Major Weapon Systems

Risk Flags

Sole-source award may limit cost savings.
Cost-plus-fixed-fee contracts require diligent oversight to control costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.8 million to LOCKHEED MARTIN CORPORATION. POLAND INTEGRATION CONTRACT

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 $33.8 million.

What is the period of performance?

Start: 2021-05-28. End: 2027-05-31.

What is Lockheed Martin's track record with similar sole-source cost-plus-fixed-fee contracts for aircraft manufacturing?

Lockheed Martin, as a major defense contractor, has a long history of executing complex sole-source contracts, often on a cost-plus basis, for aircraft development and production. These contracts are typical for highly specialized or technologically advanced platforms where competition is limited or non-existent. While their track record often includes successful delivery of sophisticated systems, cost-plus contracts inherently carry a risk of cost overruns if not managed with stringent oversight. Historical data from government accountability reports and contract databases would be needed to assess specific performance metrics, such as adherence to budget and schedule, on comparable sole-source engagements.

How does the $33.8 million award compare to other aircraft manufacturing contracts awarded by the Department of the Navy?

The $33.8 million award is relatively modest compared to the multi-billion dollar contracts typically associated with major aircraft platforms like fighter jets or large transport planes. This figure suggests the contract might be for a specific variant, a component, specialized training aircraft, or a smaller production run. To provide a precise comparison, one would need to analyze the specific type of aircraft or component being manufactured. However, in the context of the Navy's overall aerospace procurement budget, this contract represents a specific, targeted investment rather than a foundational program.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for aircraft manufacturing?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved through open bidding. The government relies heavily on the contractor's good faith in cost estimation and management. Secondly, the cost-plus-fixed-fee (CPFF) structure, while providing flexibility, can incentivize the contractor to incur higher costs to increase the fixed fee, which is a percentage of the actual costs. Effective risk mitigation requires robust government oversight, detailed cost auditing, clear performance metrics, and strong negotiation of the fixed fee and incentive structures.

What is the expected program effectiveness and return on investment for this contract?

The effectiveness of this contract is directly tied to the Department of the Navy's strategic need for the manufactured aircraft. Assuming the aircraft fulfills a critical operational requirement, its effectiveness will be measured by its performance in the field, reliability, and contribution to mission success. The return on investment is harder to quantify in purely financial terms for defense assets. It is measured by enhanced national security, operational readiness, and the successful execution of military objectives. The CPFF structure means the ROI is influenced by how efficiently the contractor manages costs to deliver the required capability.

What are the historical spending patterns for aircraft manufacturing under the Department of the Navy, and how does this contract fit?

The Department of the Navy historically spends billions of dollars annually on aircraft procurement, research, development, and maintenance. This spending encompasses a wide range of platforms, from advanced fighter jets and helicopters to training aircraft and unmanned aerial systems. This $33.8 million contract appears to represent a specific, likely niche, acquisition within that broader spending pattern. It does not seem to be part of a major new platform development but rather a targeted procurement for a specific need, possibly related to existing fleets or specialized requirements. Analyzing historical spending data would reveal trends in platform types, contract values, and award mechanisms used by the Navy.

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

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: $33,780,836

Exercised Options: $33,780,836

Current Obligation: $33,780,836

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $5,069,311

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline