DoD awards $10.18M for aircraft parts, with Lockheed Martin as sole source

Contract Overview

Contract Amount: $10,181,392 ($10.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2026-01-31

Contract Duration: 855 days

Daily Burn Rate: $11.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DMS PARTS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $10.2 million to LOCKHEED MARTIN CORPORATION for work described as: DMS PARTS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 855 days suggests a need for sustained supply. 3. Fixed-price contract type shifts performance risk to the contractor. 4. The North American Industry Classification System (NAICS) code 336413 indicates a focus on specialized aircraft component manufacturing. 5. Awarded by the Department of the Navy, this contract supports aviation readiness. 6. The contractor, Lockheed Martin, is a major defense industrial base participant.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar sole-source awards for specialized aircraft parts. The fixed-price nature provides some cost certainty, but the lack of competition inherently limits the government's ability to secure the lowest possible price. Further analysis would require understanding the unique specifications and market availability of these specific parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. This approach is typically used when a unique product or service is required, or when only one responsible source can fulfill the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple bids were considered.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through competitive bidding. The government relies on the contractor's proposed pricing and negotiation to ensure a fair price, which can be less efficient than a competitive process.

Public Impact

The primary beneficiaries are the U.S. Navy's aviation programs, ensuring the availability of critical aircraft parts. Services delivered include the manufacturing and supply of specialized aircraft components. The geographic impact is primarily within Texas, where the contractor is located, and wherever the supplied parts are utilized by the Navy. Workforce implications include continued employment for skilled manufacturing personnel at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in cost build-up for sole-source contracts.
Potential for price escalation if market conditions change significantly during the contract period.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Contractor is a well-established entity with a track record in defense manufacturing.
Award supports critical national defense aviation readiness.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, which is a niche but vital segment supporting the broader aerospace industry. Spending in this area is driven by military readiness requirements and the lifecycle support of aging and new aircraft platforms. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar specialized components within the defense sector.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Lockheed Martin Corporation, is a large defense contractor. There is no explicit information provided regarding subcontracting plans to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Lockheed Martin voluntarily engages small businesses in its supply chain for these parts.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency (DLA) Contracts
Naval Air Systems Command (NAVAIR) Support Contracts
Lockheed Martin Corporation Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Potential for price overruns
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to LOCKHEED MARTIN CORPORATION. DMS PARTS

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 $10.2 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-01-31.

What is Lockheed Martin Corporation's track record with the Department of Defense for similar aircraft parts contracts?

Lockheed Martin Corporation is a major defense contractor with an extensive history of supplying aircraft parts and systems to the Department of Defense. Analyzing their past performance on similar contracts, particularly those involving sole-source awards for specialized components, would reveal their reliability in terms of delivery, quality, and adherence to specifications. Historical data from contract databases and performance reports (e.g., Contractor Performance Assessment Reporting System - CPARS) would be crucial. A review of past contracts would likely show a pattern of significant awards, but also potential areas for scrutiny regarding pricing and delivery timelines, common in large, complex defense procurements. Their established position suggests a strong capability but also necessitates diligent oversight to ensure fair pricing and optimal value.

How does the pricing of this contract compare to market rates for similar aircraft parts, considering it's a sole-source award?

Directly comparing the pricing of this sole-source contract to market rates is inherently difficult because the competitive process, which typically drives prices towards market equilibrium, was bypassed. The government relied on negotiation and the contractor's proposed pricing. To assess value, one would need to benchmark against: 1) historical pricing for the same or similar parts from Lockheed Martin, 2) pricing of comparable parts from other manufacturers if available (even if not directly substitutable), or 3) internal cost estimates or should-cost analyses conducted by the DoD. Without such benchmarks, it's challenging to definitively state if the price is optimal. The fixed-price nature offers some predictability, but the absence of competition means the government lacks the leverage that multiple bidders would provide to secure the lowest possible price.

What are the primary risks associated with this sole-source contract for aircraft parts?

The primary risks associated with this sole-source contract include: 1) **Price Risk:** The lack of competition means the government may pay a higher price than in a competitive scenario, as there's less pressure on the contractor to offer the lowest possible bid. 2) **Performance Risk:** While Lockheed Martin is a reputable contractor, any sole-source award carries a risk of complacency or reduced urgency if the contractor knows they are the only option. This could potentially impact delivery schedules or quality, although contract terms aim to mitigate this. 3) **Dependency Risk:** The government becomes dependent on a single supplier for these critical parts, which can be problematic if the supplier faces production issues, financial instability, or decides to discontinue the product line. 4) **Scope Creep Risk:** Without clear initial specifications or competitive pressure, there's a potential for the scope of work or associated costs to expand over time.

What is the expected program effectiveness or impact of securing these aircraft parts from Lockheed Martin?

The expected program effectiveness hinges on the reliable and timely delivery of these specific aircraft parts by Lockheed Martin. These parts are crucial for maintaining the operational readiness and safety of Navy aircraft. By securing this supply, the Department of the Navy aims to prevent aircraft downtime due to part unavailability, ensuring that aviation assets are mission-capable. The effectiveness will be measured by the contractor's adherence to delivery schedules, the quality and reliability of the parts supplied, and ultimately, the contribution these parts make to the overall operational tempo and effectiveness of the naval aviation fleet. Successful execution of this contract directly supports national defense objectives by ensuring the airworthiness of critical military platforms.

How does this contract's value and duration compare to historical spending patterns for similar aircraft parts by the Department of the Navy?

Comparing this $10.18 million contract with a duration of 855 days requires analyzing historical spending patterns for similar 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) by the Department of the Navy. Historical data would reveal if this award amount is typical for sole-source procurements of specialized components, or if it represents a significant deviation. The duration also needs context; 855 days (approx. 2.3 years) suggests a need for sustained supply, possibly for a specific aircraft program's sustainment phase or a particular upgrade. Analyzing past contracts of similar scope, value, and duration, especially those awarded to Lockheed Martin or for comparable aircraft systems, would provide a benchmark to assess if this contract aligns with established spending trends or indicates a potential shift in procurement strategy or market conditions.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $10,181,392

Exercised Options: $10,181,392

Current Obligation: $10,181,392

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922D0043

IDV Type: IDC

Timeline