DoD awards $18M for aircraft parts, with Lockheed Martin as sole source

Contract Overview

Contract Amount: $18,011,818 ($18.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-10-01

End Date: 2025-09-30

Contract Duration: 1,460 days

Daily Burn Rate: $12.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SDTA DEPLOYABLE, KITS & ASSOCIATED SEPM

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $18.0 million to LOCKHEED MARTIN CORPORATION for work described as: SDTA DEPLOYABLE, KITS & ASSOCIATED SEPM Key points: 1. Contract awarded to a single vendor raises questions about price competitiveness. 2. Limited competition may lead to higher costs for taxpayers. 3. The contract duration of nearly four years suggests a long-term need for these parts. 4. The specific North American Industry Classification System (NAICS) code indicates a focus on specialized aircraft equipment. 5. The contract's value is moderate within the context of large defense procurements. 6. The firm-fixed-price structure shifts some cost risk to the government.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable pricing. The $18 million award over nearly four years suggests an average annual spend of approximately $4.5 million. Without competitive bids, it's difficult to ascertain if this represents a fair market price. The firm-fixed-price contract type offers some cost certainty but does not inherently guarantee value for money when competition is absent.

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 bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they limit the government's ability to explore alternative solutions and potentially secure lower prices through competition.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that typically arise from a competitive bidding environment. The government did not have the opportunity to compare offers and select the most cost-effective solution.

Public Impact

The Department of the Navy benefits from the acquisition of critical aircraft parts. This contract supports the maintenance and operational readiness of naval aircraft. The geographic impact is primarily linked to Lockheed Martin's facilities and naval bases where these parts are utilized. The contract supports jobs within the aerospace manufacturing sector, specifically at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Firm-fixed-price contract shifts some cost overrun risk to the government.
Lack of transparency in the justification for sole-sourcing.
Potential for complacency from the sole contractor due to lack of competition.

Positive Signals

Award to a large, established defense contractor suggests potential for reliable delivery.
Contract duration indicates a stable, long-term requirement, allowing for potential production efficiencies.
Firm-fixed-price contract provides budget predictability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The NAICS code 336413 covers the manufacturing of other aircraft parts and auxiliary equipment. The defense industry relies heavily on specialized manufacturers like Lockheed Martin for critical components. Spending in this sector is substantial, driven by national security requirements and the need to maintain aging aircraft fleets.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, it is unlikely to directly benefit small businesses through set-aside provisions. The impact on the small business ecosystem would be indirect, potentially through Lockheed Martin's own supply chain, but this is not explicitly detailed in the provided data.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. As a firm-fixed-price contract, financial oversight will focus on ensuring delivery according to specifications and schedule. Transparency regarding the justification for the sole-source award would be crucial for public accountability. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics
Naval Aviation Support
Aerospace Components

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.0 million to LOCKHEED MARTIN CORPORATION. SDTA DEPLOYABLE, KITS & ASSOCIATED SEPM

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 $18.0 million.

What is the period of performance?

Start: 2021-10-01. End: 2025-09-30.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data indicates the contract was 'NOT COMPETED' and awarded to 'LOCKHEED MARTIN CORPORATION' under a sole-source designation. Typically, sole-source justifications are required by federal acquisition regulations when only one responsible source is available or when the public exigency requires immediate delivery. Common reasons include unique technical capabilities, proprietary technology, or a critical need that cannot be met by other vendors within the required timeframe. Without the specific justification document (e.g., a Justification and Approval - J&A), the precise rationale remains unknown. This lack of competition limits the government's ability to explore alternative solutions and potentially achieve better pricing through a competitive process.

How does the $18 million contract value compare to historical spending on similar aircraft parts by the Department of the Navy or other defense agencies?

Comparing the $18 million contract value requires access to historical spending data for similar aircraft parts, which is not directly provided. However, $18 million over nearly four years (approximately $4.5 million annually) is a moderate-sized award within the defense sector. Large defense contracts can range from tens of millions to billions of dollars. To assess value, one would need to benchmark this against contracts for comparable parts (e.g., engines, avionics, structural components) procured by the Navy or other branches. The sole-source nature of this award makes direct price comparisons difficult, as competitive bids often drive prices down. Without specific comparable data, it's hard to definitively state if this represents good or poor value.

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

The primary risks associated with a sole-source contract of this magnitude ($18 million) and duration (nearly four years) include: 1. **Price:** The government may pay a higher price than if the contract were competed, as there is no competitive pressure to offer the lowest possible cost. 2. **Lack of Innovation:** The contractor may have less incentive to innovate or improve efficiency since they are guaranteed the business without facing competition. 3. **Contractor Leverage:** The sole contractor holds significant leverage, potentially leading to less favorable terms or difficulty in negotiating changes. 4. **Dependency:** The government becomes dependent on a single supplier, creating vulnerability if that supplier faces production issues, financial instability, or decides to discontinue the product line.

What is the expected performance context and impact on operational readiness for the Department of the Navy given this contract?

This contract is for 'SDTA DEPLOYABLE, KITS & ASSOCIATED SEPM,' which suggests it provides essential components or systems for deployable platforms, likely related to aircraft maintenance, modification, or operational readiness. The duration of nearly four years indicates a sustained need for these parts. Successful execution of this contract is expected to ensure the availability of critical aircraft, thereby supporting the Navy's operational missions and readiness posture. The specific impact on readiness depends on the criticality of the 'SDTA DEPLOYABLE' items and their role in maintaining aircraft serviceability.

What does the firm-fixed-price (FFP) contract type imply about cost control and risk allocation in this $18 million award?

A Firm-Fixed-Price (FFP) contract type means that the contractor, Lockheed Martin Corporation, is obligated to perform the work for a stated price, regardless of the actual costs incurred. This structure places the primary risk of cost overruns on the contractor. For the government, it offers budget certainty, as the price is fixed. However, in a sole-source scenario, the 'fixed' price might be higher than it would be in a competitive environment. The government's main concern under FFP is ensuring the contractor delivers the specified goods or services at the agreed-upon price and quality. Oversight focuses on contract compliance rather than detailed cost analysis, unless there are suspicions of contractor fraud or mischarging.

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

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: $49,612,067

Exercised Options: $18,011,818

Current Obligation: $18,011,818

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $4,527,518

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