DoD Awards $114M Lockheed Martin Contract for FTI System Hardware, Raising Competition Concerns
Contract Overview
Contract Amount: $114,314,537 ($114.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-02-23
End Date: 2026-10-30
Contract Duration: 1,345 days
Daily Burn Rate: $85.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: DELIVERY OF FTI SYSTEM HARDWARE
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $114.3 million to LOCKHEED MARTIN CORPORATION for work described as: DELIVERY OF FTI SYSTEM HARDWARE Key points: 1. Significant contract value of $114.3M for critical FTI system hardware. 2. Sole-source award to Lockheed Martin Corporation limits competitive pricing. 3. Potential for higher costs due to lack of competition. 4. Aircraft Manufacturing sector context for specialized hardware.
Value Assessment
Rating: questionable
The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed carefully. Without competitive bidding, it's difficult to assess if the $114.3M price is optimal compared to market rates for similar specialized hardware.
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 result in the government paying a premium for the FTI system hardware.
Taxpayer Impact: The lack of competition could lead to taxpayers bearing a higher cost than if the contract had been competitively awarded.
Public Impact
Taxpayers may be overpaying for essential defense system hardware. Limited visibility into the justification for a sole-source award. Potential impact on future defense procurement strategies if sole-sourcing becomes a norm.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in justification
Positive Signals
- Essential system hardware delivery
- Experienced contractor (Lockheed Martin)
Sector Analysis
The Aircraft Manufacturing sector often involves highly specialized and complex systems, justifying unique requirements. However, even in specialized areas, competitive sourcing can drive innovation and cost efficiencies.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this specific award, which is common for large, sole-source defense contracts.
Oversight & Accountability
Oversight will be crucial to ensure Lockheed Martin adheres to the fixed fee and manages costs effectively within the Cost Plus Fixed Fee structure. Transparency regarding the justification for the sole-source award is also important for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition.
- Cost-plus contract type poses cost overrun risk.
- Limited transparency on justification for sole-sourcing.
- Potential for inflated pricing.
- No clear small business participation.
Tags
aircraft-manufacturing, department-of-defense, tx, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $114.3 million to LOCKHEED MARTIN CORPORATION. DELIVERY OF FTI SYSTEM HARDWARE
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 $114.3 million.
What is the period of performance?
Start: 2023-02-23. End: 2026-10-30.
What is the specific justification for awarding this FTI system hardware contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without detailed documentation, it's difficult to ascertain the specific reasons. Agencies are expected to explore competitive options thoroughly before resorting to sole-sourcing, often requiring a formal justification and approval process.
How will the government ensure cost control and value for money given the Cost Plus Fixed Fee structure and lack of competition?
Effective cost control will rely on robust government oversight, detailed audits of contractor costs, and strict adherence to the fixed fee component. The government must actively manage the contract, monitor performance, and ensure that the contractor's costs are reasonable and allocable to the contract scope. Benchmarking against similar, albeit potentially less specialized, contracts could provide some reference points.
What is the potential impact of this sole-source award on the broader defense industrial base and future competition for similar systems?
Sole-source awards, especially for significant amounts, can disincentivize competition by signaling that established prime contractors may be favored. This could limit opportunities for emerging technologies and smaller businesses to enter the market. Over time, it might reduce the overall competitive landscape, potentially leading to higher prices and slower innovation across the defense sector.
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: $133,392,794
Exercised Options: $133,392,794
Current Obligation: $114,314,537
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: 2023-02-23
Current End Date: 2026-10-30
Potential End Date: 2026-10-30 00:00:00
Last Modified: 2025-12-23
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