DoD's $55.7M Aircraft Manufacturing Contract with Lockheed Martin Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $55,720,641 ($55.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2021-06-01
End Date: 2025-03-07
Contract Duration: 1,375 days
Daily Burn Rate: $40.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: DMS MANAGEMENT JUL2021-DEC2022
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $55.7 million to LOCKHEED MARTIN CORPORATION for work described as: DMS MANAGEMENT JUL2021-DEC2022 Key points: 1. Significant contract value of $55.7 million awarded. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for inflated costs due to limited price discovery. 4. Aircraft manufacturing sector is critical for national defense.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to assess value. Without competitive bids, it's hard to benchmark pricing against similar aircraft manufacturing contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition in this sole-source award could result in taxpayers paying a premium for aircraft manufacturing services.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on this contract for critical aircraft manufacturing capabilities. Future sole-source awards could set a precedent for less competitive contracting.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Sole-source award
Positive Signals
- Critical defense capability
- Established contractor
Sector Analysis
This contract falls within the defense sector, specifically aircraft manufacturing, which is a high-value and strategically important area for the Department of Defense. Spending benchmarks in this sector are often high due to specialized requirements and R&D.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as both the 'ss' and 'sb' fields are false. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and efficient use of taxpayer funds. Accountability mechanisms should be in place to justify the lack of competition.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type may incentivize higher spending.
- Lack of transparency in pricing due to no competitive bids.
- Potential for contractor to not prioritize cost efficiency.
Tags
aircraft-manufacturing, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $55.7 million to LOCKHEED MARTIN CORPORATION. DMS MANAGEMENT JUL2021-DEC2022
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 $55.7 million.
What is the period of performance?
Start: 2021-06-01. End: 2025-03-07.
What is the justification for awarding this contract on a sole-source basis instead of competing it?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. Without further documentation, it's difficult to ascertain the specific rationale. However, the absence of competition raises concerns about whether all avenues for competitive sourcing were thoroughly explored.
How does the cost-plus fixed fee structure impact the risk of cost overruns compared to fixed-price contracts?
Cost-plus fixed fee contracts shift a significant portion of the cost risk to the government. While the contractor's profit is fixed, they are reimbursed for all allowable costs. This can incentivize less cost-consciousness compared to fixed-price contracts, potentially leading to cost overruns if not managed diligently.
What measures are in place to ensure the effectiveness and performance of Lockheed Martin under this sole-source contract?
Effectiveness is typically ensured through stringent performance metrics, milestone tracking, and quality assurance processes outlined in the contract. For sole-source awards, robust government oversight and regular performance reviews are even more critical to ensure the contractor meets all requirements and delivers the expected outcomes.
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: $60,933,734
Exercised Options: $60,295,581
Current Obligation: $55,720,641
Subaward Activity
Number of Subawards: 98
Total Subaward Amount: $18,584,014
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
Start Date: 2021-06-01
Current End Date: 2025-03-07
Potential End Date: 2025-03-07 00:00:00
Last Modified: 2025-01-30
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- 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 — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)