DoD Awards $2.45 Billion for F-35 Long Lead Funding to Lockheed Martin

Contract Overview

Contract Amount: $24,499,768,640 ($24.5B)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-23

End Date: 2030-09-30

Contract Duration: 2,838 days

Daily Burn Rate: $8.6M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: THE PURPOSE OF THIS CONTRACT IS TO AWARD LONG LEAD FUNDING FOR F-35A, F-35B, AND F-35C AIRCRAFT FOR U.S. SERVICES, NON-DOD PARTNERS, AND FMS CUSTOMERS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $24.50 billion to LOCKHEED MARTIN CORPORATION for work described as: THE PURPOSE OF THIS CONTRACT IS TO AWARD LONG LEAD FUNDING FOR F-35A, F-35B, AND F-35C AIRCRAFT FOR U.S. SERVICES, NON-DOD PARTNERS, AND FMS CUSTOMERS Key points: 1. Significant investment in critical F-35 program components. 2. Sole-source award to Lockheed Martin, the prime contractor. 3. Long-term contract duration raises questions about future competition. 4. High value contract impacts the aerospace and defense sector.

Value Assessment

Rating: questionable

The contract value of $2.45 billion for long-lead funding is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous pricing structures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially reduces the incentive for cost optimization.

Taxpayer Impact: Taxpayer funds are committed without a competitive process, which may lead to higher costs than if multiple vendors had vied for the contract.

Public Impact

Ensures continued production of advanced F-35 fighter jets for U.S. and allied forces. Supports critical defense capabilities and national security objectives. Potential for long-term reliance on a single supplier for key components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
Sole-source award

Positive Signals

Ensures critical aircraft production
Supports allied defense capabilities

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for the F-35 Joint Strike Fighter program. Spending benchmarks in this high-tech, defense-critical area are often characterized by large, long-term sole-source agreements due to program complexity and specialized capabilities.

Small Business Impact

The contract data indicates that small businesses were not directly involved as prime contractors in this specific award. Further analysis would be needed to determine if small businesses are subcontracting opportunities within this large sole-source agreement.

Oversight & Accountability

The sole-source nature of this award warrants close oversight from the Department of Defense to ensure cost reasonableness and performance accountability. Robust auditing and performance monitoring are crucial.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns
Limited transparency in pricing
Long-term contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.50 billion to LOCKHEED MARTIN CORPORATION. THE PURPOSE OF THIS CONTRACT IS TO AWARD LONG LEAD FUNDING FOR F-35A, F-35B, AND F-35C AIRCRAFT FOR U.S. SERVICES, NON-DOD PARTNERS, AND FMS CUSTOMERS

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 $24.50 billion.

What is the period of performance?

Start: 2022-12-23. End: 2030-09-30.

What is the historical pricing trend for F-35 long-lead funding, and how does this award compare?

Historical pricing data for F-35 long-lead funding is essential for a comprehensive value assessment. Without access to previous contract values and performance metrics, it's challenging to definitively state if this $2.45 billion award represents an increase or decrease. However, the lack of competition suggests potential for higher costs compared to a competitive scenario.

What are the specific risks associated with a sole-source award for critical aircraft components?

The primary risks of a sole-source award include inflated pricing due to lack of competition, potential for complacency from the contractor regarding cost control and innovation, and a lack of alternative suppliers in case of performance issues or supply chain disruptions. This can lead to increased long-term costs for taxpayers.

How does this long-lead funding impact the overall effectiveness and readiness of the F-35 program?

Securing long-lead funding is crucial for maintaining the production pipeline and ensuring the timely delivery of F-35 aircraft. This investment helps mitigate risks of production delays and ensures that the U.S. military and its allies have access to these advanced capabilities, thereby supporting overall program effectiveness and 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

Solicitation ID: N0001923R0001

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1 LOCKHEED BLVD, 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: $24,663,684,619

Exercised Options: $24,653,355,450

Current Obligation: $24,499,768,640

Subaward Activity

Number of Subawards: 2878

Total Subaward Amount: $3,358,998,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline