DoD Awards $618M Lockheed Martin Contract for AVSC Supply Support Through 2033
Contract Overview
Contract Amount: $6,179,610,861 ($6.2B)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2024-06-28
End Date: 2033-09-30
Contract Duration: 3,381 days
Daily Burn Rate: $1.8M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: CY24 AVSC SUPPLY SUPPORT
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $6.18 billion to LOCKHEED MARTIN CORPORATION for work described as: CY24 AVSC SUPPLY SUPPORT Key points: 1. Significant contract value of $618 million awarded to a single large business. 2. Sole-source award to Lockheed Martin raises questions about competition and potential price inflation. 3. Long contract duration (9 years) may limit opportunities for future cost savings or technology updates. 4. Focus on aircraft manufacturing suggests a critical but potentially high-cost sector for the Navy.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee (CPIF) structure allows for profit based on meeting targets, but the lack of competition makes it difficult to benchmark pricing against similar services. The base value of $618 million over 9 years warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This significantly limits price discovery and may lead to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The absence of competition in this large contract could result in taxpayers paying a premium for aircraft supply support, potentially diverting funds from other critical defense needs.
Public Impact
Taxpayers may be overpaying for essential aircraft parts and support due to the lack of competitive bidding. The long-term nature of the contract could stifle innovation in supply chain management for military aircraft. Dependence on a single contractor for critical components raises concerns about supply chain resilience and national security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of competition
- High contract value
Positive Signals
- Supports critical defense needs
- Established contractor with relevant experience
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of national defense. Spending benchmarks in this area are often high due to specialized requirements and R&D costs, but the sole-source nature here is a key concern.
Small Business Impact
The contract is awarded to Lockheed Martin Corporation, a large business. There is no indication that small businesses will be involved as subcontractors, suggesting a missed opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of the Navy to ensure fair pricing and performance. Transparency regarding cost breakdowns and performance metrics will be crucial for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Long contract duration (9 years) may lead to outdated technology or inflated costs over time.
- Lack of small business participation.
- Potential for cost overruns due to CPIF structure without competitive baseline.
- High contract value concentrated with a single large business.
Tags
aircraft-manufacturing, department-of-defense, va, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $6.18 billion to LOCKHEED MARTIN CORPORATION. CY24 AVSC SUPPLY 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 $6.18 billion.
What is the period of performance?
Start: 2024-06-28. End: 2033-09-30.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. Robust oversight is essential to ensure fair pricing through detailed cost analysis, negotiation, and performance monitoring. Without competition, the government must rely heavily on its own expertise and negotiation skills to prevent overpayment.
How does the Cost Plus Incentive Fee structure mitigate risks associated with a sole-source, long-term contract for aircraft supply?
The CPIF structure aims to incentivize the contractor to control costs by sharing savings or overruns with the government. However, in a sole-source scenario, the baseline targets are set without competitive input, potentially inflating initial estimates. While it offers some cost control, the lack of competition remains a primary risk.
What is the projected impact of this contract on the overall defense budget and the availability of funds for other critical programs?
A $618 million contract represents a significant allocation of defense funds. The long duration means these funds are committed for nearly a decade. Without competitive pressure, the actual cost could exceed initial projections, potentially straining the budget and limiting resources for other essential defense initiatives or modernization efforts.
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: N0001921R0080
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $16,761,603,515
Exercised Options: $8,560,785,541
Current Obligation: $6,179,610,861
Subaward Activity
Number of Subawards: 276
Total Subaward Amount: $99,482,722
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-06-28
Current End Date: 2033-09-30
Potential End Date: 2033-09-30 00:00:00
Last Modified: 2025-12-19
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)