DoD Awards $223.7M Contract to Lockheed Martin for Aircraft Manufacturing
Contract Overview
Contract Amount: $223,703,473 ($223.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-03-27
End Date: 2027-12-31
Contract Duration: 1,740 days
Daily Burn Rate: $128.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: LANCE 23-27
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $223.7 million to LOCKHEED MARTIN CORPORATION for work described as: LANCE 23-27 Key points: 1. Significant contract value for aircraft manufacturing services. 2. Sole-source award limits competitive pricing opportunities. 3. Long-term duration (2027) suggests a sustained need. 4. Fixed Price Incentive contract type aims to balance cost and performance.
Value Assessment
Rating: questionable
Pricing is not available for assessment against similar contracts. The fixed-price incentive structure suggests an attempt to control costs, but without benchmarks, its effectiveness is unclear.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition raises concerns about whether the government is achieving the best possible value for taxpayer dollars.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The long contract duration could lock in current pricing structures, potentially missing out on future cost efficiencies. Dependence on a single contractor for critical aircraft manufacturing needs could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of pricing data
- Long contract duration
Positive Signals
- Fixed Price Incentive contract type
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, which is a critical component of the defense industry. Spending in this sector is often characterized by high R&D costs and long production cycles.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This award appears to bypass opportunities for small business participation.
Oversight & Accountability
Oversight will be crucial to ensure Lockheed Martin meets performance requirements and that the incentive structure effectively controls costs. Transparency in reporting is essential.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- No pricing data available
- Potential for cost overruns
- Limited small business participation
- Long-term contractor dependency
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 $223.7 million to LOCKHEED MARTIN CORPORATION. LANCE 23-27
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 $223.7 million.
What is the period of performance?
Start: 2023-03-27. End: 2027-12-31.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs that only one contractor can meet. Without specific details, it's difficult to assess the validity of this claim. Fair and reasonable pricing in sole-source contracts often relies on historical data, cost analysis, and negotiation, but the absence of public benchmarks makes independent verification challenging.
How does the fixed-price incentive structure compare to industry standards for similar aircraft manufacturing contracts?
Fixed-price incentive contracts aim to share cost savings or overruns between the government and the contractor based on achieving target costs. Without access to the specific target cost, ceiling price, and share ratio, a direct comparison to industry standards is impossible. The effectiveness hinges on realistic target setting and robust government oversight of contractor performance and cost reporting.
What are the potential long-term risks associated with a sole-source, multi-year contract for aircraft manufacturing?
Long-term risks include potential cost escalation beyond initial projections, reduced innovation due to lack of competition, and contractor lock-in. If the contractor faces production issues or significant cost increases, the government may have limited recourse. Furthermore, reliance on a single source can create vulnerabilities in the supply chain and hinder the adoption of new technologies.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $234,445,481
Exercised Options: $224,589,085
Current Obligation: $223,703,473
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: 2023-03-27
Current End Date: 2027-12-31
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2025-09-23
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