DoD awards $75.7M for early tooling, with Lockheed Martin securing the sole-source contract

Contract Overview

Contract Amount: $75,704,239 ($75.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-04-08

End Date: 2026-09-29

Contract Duration: 1,635 days

Daily Burn Rate: $46.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY22 EARLY FRP TOOLING

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $75.7 million to LOCKHEED MARTIN CORPORATION for work described as: FY22 EARLY FRP TOOLING Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Long performance period (over 4 years) suggests a significant, ongoing need. 3. Sole-source award raises questions about potential price efficiencies and competition. 4. Contract value represents a substantial investment in specialized manufacturing capabilities. 5. Focus on aircraft parts manufacturing aligns with broader defense sector needs. 6. No small business set-aside or subcontracting noted, potentially limiting broader economic impact.

Value Assessment

Rating: fair

The contract value of $75.7 million for early tooling is significant. Without comparable sole-source awards for similar early tooling phases in aircraft manufacturing, a direct value-for-money assessment is challenging. The firm-fixed-price structure provides some cost certainty, but the lack of competition means there's no market-driven benchmark to assess if the pricing is optimal. Further analysis would require understanding the specific tooling requirements and comparing them to industry standards for similar programs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means that taxpayers did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value.

Public Impact

The Department of the Navy benefits from the acquisition of essential early tooling for a specific program. This tooling is critical for the future production of aircraft parts, supporting national defense capabilities. The contract supports advanced manufacturing activities within the aerospace sector. Workforce implications include potential job creation or retention at Lockheed Martin's facilities, particularly in Connecticut.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to optimize costs over the contract life.
Absence of small business involvement could mean missed opportunities for economic inclusion and broader supplier development.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable, long-term need and commitment to the program.
Award to a major defense contractor like Lockheed Martin indicates access to established expertise and infrastructure.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such specialized tooling is often characterized by high barriers to entry due to technological complexity and significant capital investment. Spending in this area is driven by defense procurement cycles and the need for advanced manufacturing capabilities to support new or existing aircraft platforms. Comparable spending benchmarks would typically be found within other large-scale defense manufacturing contracts for similar tooling or production support.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to include specific subcontracting requirements for them. The award to a large prime contractor like Lockheed Martin suggests that the primary manufacturing and tooling activities will likely be performed in-house or through established large-scale supply chains. This could limit opportunities for small businesses to participate directly in this specific contract, although they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny may be higher to ensure fair and reasonable pricing. Transparency is facilitated through contract databases, but detailed insights into the specific tooling processes and cost breakdowns are typically proprietary. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Aircraft Manufacturing
Defense Production Equipment
Aerospace Tooling
Lockheed Martin Contracts
Department of the Navy Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.7 million to LOCKHEED MARTIN CORPORATION. FY22 EARLY FRP TOOLING

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 $75.7 million.

What is the period of performance?

Start: 2022-04-08. End: 2026-09-29.

What is the specific nature of the 'early tooling' being procured, and why is it considered unique or sole-source?

The contract data indicates the North American Industry Classification System (NAICS) code is 336413, pertaining to Other Aircraft Parts and Auxiliary Equipment Manufacturing. 'Early tooling' typically refers to the specialized molds, jigs, fixtures, and machinery required to initiate the production process for new or modified aircraft components. The sole-source nature suggests this tooling may be proprietary to Lockheed Martin, essential for a specific, perhaps classified, aircraft program, or developed under prior research and development efforts where Lockheed Martin holds unique intellectual property. Without further classification details, it's difficult to pinpoint the exact application, but it's critical for establishing the manufacturing baseline before full-rate production.

How does the $75.7 million contract value compare to similar early tooling investments in the aerospace sector?

Benchmarking the $75.7 million value for 'early tooling' is challenging without specific details on the complexity and scale of the components being manufactured. However, for major defense aircraft programs, initial tooling investments can range from tens to hundreds of millions of dollars, depending on factors like the number of unique parts, production rates, and technological sophistication. Given Lockheed Martin's role as a prime contractor for significant platforms, this figure appears within the expected range for establishing foundational manufacturing capabilities. The sole-source nature, however, prevents a direct comparison against competitive bids for similar tooling, making a precise value-for-money assessment difficult.

What are the potential risks associated with a sole-source award for this significant tooling investment?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. Taxpayers may end up paying more than if multiple companies had vied for the contract. Another risk is reduced innovation; without competition, the contractor may have less incentive to explore cost-saving efficiencies or novel manufacturing techniques. Furthermore, reliance on a single source can create supply chain vulnerabilities if that contractor faces production issues or financial instability. The government also loses the opportunity to discover potentially superior or more cost-effective solutions that other capable firms might have offered.

What is Lockheed Martin's track record with the Department of the Navy for similar contracts?

Lockheed Martin Corporation is a major defense contractor with an extensive history of contracts awarded by the Department of the Navy, spanning decades and encompassing a wide array of defense systems, including naval aircraft, submarines, and associated support services. Their track record typically involves large, complex, and often sole-source or limited-competition awards due to the specialized nature of defense technology. While specific performance metrics for individual contracts vary, Lockheed Martin generally possesses a well-established infrastructure and expertise necessary for fulfilling demanding defense requirements. Past performance reviews and contract histories available through federal procurement databases would provide more granular insights into their specific delivery and quality record with the Navy.

What are the long-term implications of this contract for future spending on this aircraft program?

This $75.7 million award for early tooling is likely an initial investment that sets the stage for significant future spending on the associated aircraft program. The tooling is essential for enabling production, implying that subsequent contracts will cover component manufacturing, assembly, testing, and sustainment. The duration of the tooling contract (ending September 2026) suggests that full-rate production or subsequent phases are expected to follow. The cost and efficiency of this initial tooling phase could influence the overall cost and schedule of the entire program. Understanding the program's lifecycle cost will be crucial, and this contract represents a foundational element within that larger financial picture.

Are there any specific performance metrics or milestones tied to this $75.7 million tooling contract?

The provided data indicates a 'FIRM FIXED PRICE' contract type and a delivery order ('AW') with a start date of April 8, 2022, and an end date of September 29, 2026. While the data doesn't explicitly list performance metrics, firm-fixed-price contracts typically imply that the contractor is obligated to deliver the specified tooling by the agreed-upon date and meet defined quality standards. Milestones are often implicitly tied to the delivery schedule and the successful establishment of the tooling's readiness for production use. Detailed performance metrics, such as specific tolerances, throughput capabilities of the tooling, or acceptance testing criteria, would likely be outlined in the contract's statement of work (SOW) or associated technical exhibits, which are not fully detailed in the summary data.

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

Solicitation ID: N0001919R0089

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: $75,704,239

Exercised Options: $75,704,239

Current Obligation: $75,704,239

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $17,759,265

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