Navy awards $37.5M for aircraft parts, a sole-source contract for Lockheed Martin in Texas

Contract Overview

Contract Amount: $37,490,229 ($37.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-09-21

End Date: 2023-12-31

Contract Duration: 831 days

Daily Burn Rate: $45.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS MODIFICATION IS TO PROCURE THE AME MATERIAL TO FULFILL LOT 15 AME REQUIREMENTS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $37.5 million to LOCKHEED MARTIN CORPORATION for work described as: THE PURPOSE OF THIS MODIFICATION IS TO PROCURE THE AME MATERIAL TO FULFILL LOT 15 AME REQUIREMENTS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of over two years suggests a substantial need. 3. Focus on specialized aircraft parts indicates a niche but critical requirement. 4. The contract's value is substantial, warranting scrutiny of its necessity and pricing. 5. Geographic concentration in Texas may have local economic implications. 6. Fixed-price contract type shifts some risk to the contractor.

Value Assessment

Rating: fair

The contract value of $37.5 million for aircraft parts is significant. Without comparable sole-source awards or detailed cost breakdowns, it's difficult to definitively benchmark value. However, the lack of competition inherently raises concerns about potential overpricing compared to a competitively bid scenario. The fixed-price nature provides some cost certainty, but the absence of competitive pressure means the government may not be achieving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin Corporation, was solicited. This approach is typically used when only one responsible source is available or when there's a compelling justification for not seeking competition. The lack of multiple bidders means there was no direct price comparison or negotiation leverage derived from a competitive process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The government did not benefit from the price discovery mechanisms inherent in a multi-bidder scenario.

Public Impact

The Department of the Navy benefits from the procurement of essential aircraft parts. This contract supports the operational readiness of naval aviation assets. The primary service delivered is the supply of specialized aircraft components. The geographic impact is concentrated in Texas, where the contractor is located. Workforce implications are likely within Lockheed Martin's facilities in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs.
Lack of transparency in the justification for sole-sourcing.
Long contract duration without clear performance milestones could indicate scope creep risk.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Procurement of critical aircraft material ensures operational readiness.
Contractor is a well-established aerospace and defense company.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' covers establishments primarily engaged in manufacturing aircraft parts and auxiliary equipment, not elsewhere classified. Spending in this sector is substantial, driven by military modernization and maintenance requirements. Benchmarking this specific award is challenging without more detail on the exact 'AME material' and its criticality, but it represents a portion of the broader defense industrial base's support infrastructure.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. Given the sole-source nature and the prime contractor being Lockheed Martin, a large defense contractor, the direct impact on small businesses through this specific award is likely minimal unless subcontracting opportunities are later identified and pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and approval process would be subject to specific federal acquisition regulations. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of the Navy Aircraft Procurement
Lockheed Martin Defense Contracts
Aerospace Parts Manufacturing
Sole-Source Defense Acquisitions
Aircraft Component Support

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to lack of competition.
Limited transparency regarding the justification for sole-sourcing.
Dependency on a single supplier for critical aircraft parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.5 million to LOCKHEED MARTIN CORPORATION. THE PURPOSE OF THIS MODIFICATION IS TO PROCURE THE AME MATERIAL TO FULFILL LOT 15 AME REQUIREMENTS

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 $37.5 million.

What is the period of performance?

Start: 2021-09-21. End: 2023-12-31.

What is the specific 'AME material' being procured, and why is it critical for naval aviation?

The provided data does not specify the exact nature of the 'AME material.' However, its procurement under a sole-source contract by the Department of the Navy suggests it is a critical component for specific aircraft systems, likely related to maintenance, repair, or upgrade programs. The 'AME' acronym could stand for various technical terms within aerospace, such as 'Advanced Materials Engineering,' 'Avionics Module Electronics,' or a specific part designation. The criticality stems from its essential role in maintaining the airworthiness, performance, or operational capability of naval aircraft. Without further details, its precise function and the justification for sole-sourcing remain opaque, but its inclusion in a multi-million dollar contract over two years underscores its importance to ongoing naval operations.

What was the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for competitive acquisitions, but also provides exceptions for sole-source procurements. Common justifications include that only one responsible source exists with the unique capability or proprietary data required, or that urgent and compelling circumstances necessitate a sole-source award. For this contract, the justification likely centers on Lockheed Martin possessing the proprietary rights, specialized manufacturing capabilities, or unique technical data necessary to produce the 'AME material.' The Department of the Navy would have had to formally document and approve this justification, adhering to strict regulatory requirements to ensure the sole-source award was indeed necessary and in the government's best interest, despite the lack of competition.

How does the $37.5 million value compare to historical spending on similar aircraft parts by the Navy?

The provided data does not include historical spending figures for similar aircraft parts, making a direct comparison difficult. However, $37.5 million is a substantial sum for a single delivery order, even within the defense sector. The duration of the contract (ending December 31, 2023, with a start date of September 21, 2021, totaling 831 days) indicates a sustained need for these parts. Without access to historical contract databases or specific program cost baselines, it's challenging to determine if this represents an increase, decrease, or stable level of spending compared to previous periods or similar procurements. The sole-source nature further complicates benchmarking, as competitive awards often yield lower prices.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risk associated with a sole-source contract of this magnitude ($37.5 million) and duration (over two years) is the potential for inflated pricing due to the lack of competitive pressure. The government foregoes the opportunity to leverage multiple bids to secure the best possible price. Additionally, sole-source awards can sometimes indicate a lack of market research or a reliance on a single supplier, which can create dependency and limit future flexibility. There's also a risk of contractor complacency, where the absence of competition might reduce incentives for efficiency or innovation. Furthermore, if the 'AME material' is critical, supply chain disruptions affecting the sole provider could have significant operational impacts on naval aviation readiness.

What is Lockheed Martin Corporation's track record with the Department of the Navy for aircraft parts?

Lockheed Martin Corporation is a major defense contractor with an extensive and long-standing relationship with the Department of the Navy, involved in numerous aircraft programs, including fighter jets (like the F-35, F-16 variants), maritime patrol aircraft, and helicopters. Their track record typically includes the manufacturing and support of complex aircraft systems and components. While specific performance metrics for this particular 'AME material' procurement are not detailed, Lockheed Martin is generally recognized for its capabilities in aerospace manufacturing and systems integration. However, like any large contractor, they have also faced scrutiny over contract costs and performance on various programs throughout their history.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $37,490,229

Exercised Options: $37,490,229

Current Obligation: $37,490,229

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001919D0015

IDV Type: IDC

Timeline