DoD awards $83M for F-35 training systems, with Lockheed Martin as sole source

Contract Overview

Contract Amount: $83,131,283 ($83.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-09-28

End Date: 2027-02-28

Contract Duration: 1,614 days

Daily Burn Rate: $51.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CONTRACT N0001922F2073 IS A DELIVERY ORDER FOR DISTRIBUTED MISSION TRAINING (DMT) REQUIREMENTS FOR THE F-35 JPO TSS PMO FROM 2022-2024.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $83.1 million to LOCKHEED MARTIN CORPORATION for work described as: CONTRACT N0001922F2073 IS A DELIVERY ORDER FOR DISTRIBUTED MISSION TRAINING (DMT) REQUIREMENTS FOR THE F-35 JPO TSS PMO FROM 2022-2024. Key points: 1. Contract awarded to incumbent for critical F-35 training systems. 2. Sole-source award raises questions about price competition and value. 3. Extended performance period suggests long-term reliance on this contractor. 4. Focus on distributed mission training highlights evolving military needs. 5. Potential for cost overruns given the Cost Plus Fixed Fee structure.

Value Assessment

Rating: questionable

The contract's value of $83.1 million for distributed mission training (DMT) for the F-35 Joint Program Office (JPO) requires careful benchmarking. As a sole-source award to Lockheed Martin, direct comparisons to similar contracts are limited. However, the Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex development, can lead to less price certainty for the government compared to fixed-price contracts. The extended period of performance (2022-2027) suggests a significant investment, and the government will need to closely monitor costs to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. Lockheed Martin, the incumbent contractor for F-35 training systems, was selected without a formal bidding process. While sole-source awards can be justified for unique capabilities or to maintain continuity, they inherently limit price discovery and potentially reduce competitive pressure that could drive down costs.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these critical training services, as there was no opportunity for other companies to offer alternative solutions or more competitive pricing.

Public Impact

Pilots and aircrew of the F-35 program will benefit from advanced training capabilities. Enhances readiness and operational effectiveness for the F-35 fleet. Supports the sustainment and modernization of the F-35 training infrastructure. Impacts the specialized workforce involved in developing and maintaining training systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type may incentivize cost increases.
Extended performance period could lock in potentially suboptimal pricing.
Lack of transparency in the justification for sole-source award.

Positive Signals

Award to incumbent ensures continuity of critical training capabilities.
Focus on advanced distributed mission training aligns with modern warfare needs.
Contract supports a key program for national defense (F-35).

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long-term government contracts. This contract for F-35 Distributed Mission Training (DMT) falls within the aircraft manufacturing and support services sub-sector. The F-35 program itself represents one of the largest defense procurements globally, with substantial ongoing spending on sustainment, upgrades, and training. Benchmarking this contract's value is challenging due to its specialized nature and sole-source award, but it is a component of the broader F-35 sustainment ecosystem, which involves billions in annual spending.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Given the sole-source nature and the prime contractor being Lockheed Martin, a large aerospace company, the direct impact on small businesses through prime contract awards is unlikely. However, Lockheed Martin may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data. The absence of a set-aside suggests that opportunities for small businesses to directly compete for this specific contract were not prioritized.

Oversight & Accountability

Oversight for this contract will likely fall under the F-35 Joint Program Office (JPO) and the Department of Defense's acquisition and contract management authorities. The Cost Plus Fixed Fee (CPFF) structure necessitates robust government oversight to monitor costs, ensure performance, and prevent contractor overruns. Transparency is a concern due to the sole-source nature of the award. Inspector General (IG) investigations could be initiated if performance issues or suspected fraud arise, but proactive oversight is crucial for managing CPFF contracts effectively.

Related Government Programs

F-35 Program Support
Military Training Systems
Aircraft Sustainment Services
Defense Logistics and Support

Risk Flags

Sole Source Justification
Cost Plus Fixed Fee Structure
Potential for Cost Overruns
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.1 million to LOCKHEED MARTIN CORPORATION. CONTRACT N0001922F2073 IS A DELIVERY ORDER FOR DISTRIBUTED MISSION TRAINING (DMT) REQUIREMENTS FOR THE F-35 JPO TSS PMO FROM 2022-2024.

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 $83.1 million.

What is the period of performance?

Start: 2022-09-28. End: 2027-02-28.

What is Lockheed Martin's track record with F-35 training systems and similar contracts?

Lockheed Martin Corporation is the prime contractor for the F-35 Lightning II program and has a long-standing history of developing and supporting its training systems. Their track record includes the development of the F-35's mission planning systems, simulators, and other distributed training capabilities. Given their integral role in the F-35's lifecycle, they possess unique institutional knowledge and technical expertise. However, like many large defense contractors, they have faced scrutiny regarding cost overruns and schedule delays on various programs, including aspects of the F-35. The specific performance on this Distributed Mission Training (DMT) contract would require a deeper dive into performance metrics and delivery timelines beyond the basic contract data.

How does the $83.1 million contract value compare to similar distributed mission training contracts?

Directly comparing the $83.1 million contract value for this specific Distributed Mission Training (DMT) requirement is challenging due to its sole-source nature and the specialized requirements of the F-35 program. Benchmarking typically involves comparing costs for similar services across different contracts or contractors. However, as this is a sole-source award to Lockheed Martin, a competitive benchmark is absent. The value should be assessed against the scope of work, the duration of the contract (approximately 4.5 years), and the complexity of the F-35's training needs. The Cost Plus Fixed Fee (CPFF) structure also means the final cost could vary. Without comparable competed contracts for F-35 DMT, assessing value-for-money relies heavily on internal government cost estimates and performance monitoring.

What are the primary risks associated with this sole-source, Cost Plus Fixed Fee contract?

The primary risks associated with this sole-source, Cost Plus Fixed Fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in a competed environment. The government lacks the benefit of market forces driving cost efficiency. Secondly, the CPFF structure, while providing flexibility, carries inherent risks of cost escalation. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize cost growth if not rigorously managed. This necessitates strong government oversight to scrutinize costs, prevent inefficiencies, and ensure the fixed fee remains appropriate for the effort. There's also a risk of vendor lock-in, making future transitions more difficult and costly.

How effective is distributed mission training (DMT) for the F-35 program, and what is the expected impact of this contract?

Distributed Mission Training (DMT) is considered a crucial component for modern air forces, enabling pilots to train in realistic, networked combat scenarios without requiring physical deployment of aircraft and personnel. For the F-35 program, DMT allows for complex joint and coalition training exercises, enhancing pilot proficiency, tactical development, and interoperability. This contract is expected to ensure the continued availability and enhancement of these vital training capabilities through 2027. Its effectiveness is tied to the realism of the simulations, the ability to network diverse training environments, and the integration with other F-35 support systems. The expected impact is improved F-35 pilot readiness, reduced operational costs associated with live training, and enhanced mission effectiveness.

What are the historical spending patterns for F-35 training systems, and how does this contract fit?

Historical spending on F-35 training systems has been substantial, reflecting the complexity and scale of the program. This includes investments in simulators, virtual training environments, mission planning software, and sustainment of these systems. Spending typically occurs across multiple contract vehicles and phases, from initial development to sustainment and upgrades. This $83.1 million delivery order represents a specific funding action for Distributed Mission Training (DMT) requirements from 2022 to 2024 (with an extended period to 2027). It fits within the broader F-35 sustainment and modernization budget, addressing the ongoing need for advanced training capabilities as the F-35 fleet grows and evolves. Previous spending on similar training infrastructure would likely inform the government's cost estimates for this contract, although the sole-source nature limits direct comparison.

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 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: $89,027,700

Exercised Options: $89,027,700

Current Obligation: $83,131,283

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $169,102

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