DoD Awards $56.5M for Aircraft Retrofit to Lockheed Martin, Lacking Competition

Contract Overview

Contract Amount: $56,516,353 ($56.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-06-21

End Date: 2026-03-31

Contract Duration: 1,744 days

Daily Burn Rate: $32.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: MODIFICATION/RETROFIT NON-RECURRING

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76101

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $56.5 million to LOCKHEED MARTIN CORPORATION for work described as: MODIFICATION/RETROFIT NON-RECURRING Key points: 1. Significant award value of $56.5 million for aircraft modification. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for higher costs due to lack of competitive bidding. 4. Aircraft Manufacturing sector sees substantial non-recurring spending.

Value Assessment

Rating: questionable

The contract's cost-plus-no-fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Benchmarking against similar non-recurring retrofit contracts would be necessary to determine if the $56.5 million is reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating no competitive bidding process. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these aircraft modifications.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the award. The Department of the Navy is investing heavily in aircraft sustainment. This contract supports critical defense capabilities through aircraft upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus-no-fee contract type
Lack of competition

Positive Signals

Supports critical defense assets
Long-term contract duration

Sector Analysis

This award falls within the Aircraft Manufacturing sector, specifically for non-recurring modification and retrofitting. Spending in this area is crucial for maintaining and upgrading aging military fleets, but competitive sourcing is key to cost efficiency.

Small Business Impact

This contract was awarded directly to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received fair value. A review of the justification for sole-source procurement is recommended.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Sole-source award
Cost-plus-no-fee contract type
Potential for inflated costs
Limited oversight on pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.5 million to LOCKHEED MARTIN CORPORATION. MODIFICATION/RETROFIT NON-RECURRING

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 $56.5 million.

What is the period of performance?

Start: 2021-06-21. End: 2026-03-31.

What is the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or situations where only one responsible source can fulfill the requirement. Without the specific justification document, it's impossible to confirm the rationale. However, the absence of competition raises concerns about potential cost inefficiencies and limits the government's ability to leverage market forces for better pricing.

How does the cost-plus-no-fee structure impact the government's risk and the contractor's incentive for cost control?

A Cost-Plus-No-Fee (CPNF) contract reimburses the contractor for allowable costs but provides no additional profit. This structure shifts most of the financial risk to the government, as it covers all approved expenses. While it can be used in specific situations, it offers minimal incentive for the contractor to control costs aggressively, as their fee is not tied to cost savings.

What is the potential impact on future aircraft sustainment costs if sole-source awards become a pattern?

If sole-source awards become a pattern for aircraft sustainment, it could lead to consistently higher costs for the government. Without competitive pressure, contractors may have less incentive to innovate or offer competitive pricing. This could strain defense budgets over the long term and reduce the overall value taxpayers receive for their investment in military readiness.

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 NO FEE (S)

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: $57,635,059

Exercised Options: $57,635,059

Current Obligation: $56,516,353

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $4,305,251

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001919G0008

IDV Type: BOA

Timeline