DoD Awards $183.7M Lockheed Martin Contract for Aircraft Engineering Support

Contract Overview

Contract Amount: $18,372,923 ($18.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-22

End Date: 2028-03-31

Contract Duration: 1,652 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS DELIVERY ORDER IS PLACING AN ORDER FOR THE DEVELOPMENT OF PRODUCTION ENGINEERING CHANGE PROPOSALS (ECPS), RETROFIT ENGINEERING RELEASE REPORTS (ERRS), LEVEL OF EFFORT (LOE) INVESTIGATIONS AND PROGRAM SUPPORT.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $18.4 million to LOCKHEED MARTIN CORPORATION for work described as: THIS DELIVERY ORDER IS PLACING AN ORDER FOR THE DEVELOPMENT OF PRODUCTION ENGINEERING CHANGE PROPOSALS (ECPS), RETROFIT ENGINEERING RELEASE REPORTS (ERRS), LEVEL OF EFFORT (LOE) INVESTIGATIONS AND PROGRAM SUPPORT. Key points: 1. Significant contract awarded to a major defense contractor, Lockheed Martin. 2. Focus on engineering change proposals and program support for aircraft. 3. Potential for long-term sustainment and follow-on work. 4. High value indicates critical program needs. 5. Limited competition raises questions about cost-effectiveness.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar aircraft engineering support contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in a higher price than if competition were present.

Taxpayer Impact: The lack of competition for this substantial award means taxpayers may not be receiving the best possible value, as pricing is not pressure-tested.

Public Impact

Ensures continued support for critical aircraft programs, maintaining operational readiness. Supports advanced engineering and development, potentially leading to future technological advancements. Impacts the aerospace and defense sector workforce, particularly at Lockheed Martin facilities. Long contract duration suggests ongoing program requirements and potential for sustained economic activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long performance period

Positive Signals

Critical program support
Major defense contractor expertise
Long-term engagement

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a key area for the Department of Defense. Spending benchmarks in this sector are highly variable, but large sole-source contracts for specialized engineering are common for major platforms.

Small Business Impact

This contract was awarded directly to Lockheed Martin Corporation and does not appear to include specific provisions or set-asides for small businesses. The prime contractor may subcontract to small businesses, but this is not explicitly detailed.

Oversight & Accountability

The Department of the Navy is the awarding agency. Oversight will be crucial given the sole-source, cost-plus nature of the contract to ensure funds are used efficiently and effectively towards program goals.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competitive pricing.
Cost-plus contract type carries inherent risk of cost overruns.
Long performance period increases exposure to potential inefficiencies.
Lack of detail on specific deliverables and performance metrics.
Potential for scope creep without strict oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to LOCKHEED MARTIN CORPORATION. THIS DELIVERY ORDER IS PLACING AN ORDER FOR THE DEVELOPMENT OF PRODUCTION ENGINEERING CHANGE PROPOSALS (ECPS), RETROFIT ENGINEERING RELEASE REPORTS (ERRS), LEVEL OF EFFORT (LOE) INVESTIGATIONS AND PROGRAM SUPPORT.

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 $18.4 million.

What is the period of performance?

Start: 2023-09-22. End: 2028-03-31.

What specific justification was provided for the sole-source award, and how does it align with DoD's stated goals for promoting competition?

The justification for a sole-source award typically centers on unique capabilities, urgent needs, or lack of viable alternatives. For this contract, the specific justification from the Department of the Navy is not provided in the data. However, DoD policy generally requires full and open competition unless specific exceptions apply. The lack of competition here warrants scrutiny to ensure it was a necessary exception and not a missed opportunity for better value.

How will the Cost Plus Fixed Fee structure be managed to mitigate risks of cost overruns and ensure fair pricing for the government?

Managing a Cost Plus Fixed Fee (CPFF) contract requires robust government oversight, including detailed cost monitoring, performance reviews, and negotiation of the fixed fee. The Department of the Navy must implement stringent controls to track allowable costs, ensure efficiency, and prevent scope creep. Regular audits and performance metrics are essential to hold Lockheed Martin accountable and ensure the fixed fee remains fair relative to the effort and risks involved.

What are the key performance indicators (KPIs) for this contract, and how will their achievement be measured to ensure effective delivery of engineering change proposals and program support?

Key performance indicators for this contract would likely include timely delivery of Engineering Change Proposals (ECPs) and Retrofit Engineering Release Reports (ERRs), successful completion of Level of Effort (LOE) investigations, and overall program support effectiveness. The Department of the Navy should establish clear, measurable KPIs tied to technical performance, schedule adherence, and quality standards. Regular progress reviews and performance assessments against these KPIs will be critical for ensuring the contractor meets contractual obligations.

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: N0001922R0065

Pricing Type: COST PLUS FIXED FEE (U)

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

Financial Breakdown

Contract Ceiling: $22,695,904

Exercised Options: $22,695,904

Current Obligation: $18,372,923

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001923D0022

IDV Type: IDC

Timeline