DoD awards $488.6M for aircraft armament, with Lockheed Martin as sole provider

Contract Overview

Contract Amount: $48,860,228 ($48.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-06-06

End Date: 2028-04-30

Contract Duration: 1,424 days

Daily Burn Rate: $34.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS CONTRACT ACQUIRES AIRCRAFT ARMAMENT EQUIPMENT FOR AARGM-ER FOR USAF, USN, USMC, FMS CUSTOMERS, AND PROGRAM PARTNERS.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $48.9 million to LOCKHEED MARTIN CORPORATION for work described as: THIS CONTRACT ACQUIRES AIRCRAFT ARMAMENT EQUIPMENT FOR AARGM-ER FOR USAF, USN, USMC, FMS CUSTOMERS, AND PROGRAM PARTNERS. Key points: 1. Contract value represents a significant investment in advanced aerial weaponry. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Long performance period suggests a sustained need for this specific armament. 4. Focus on AARGM-ER indicates a strategic priority for air-to-ground strike capabilities. 5. Involvement of multiple military branches and international partners highlights broad utility.

Value Assessment

Rating: questionable

The contract value of $488.6 million for aircraft armament equipment is substantial. Without comparable contract data for the AARGM-ER system, it is difficult to benchmark its value effectively. The firm fixed-price structure provides some cost certainty, but the lack of competition means there's no direct market comparison to assess if the pricing is optimal. Further analysis would require understanding the unit costs and comparing them to similar advanced missile systems.

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 considered. This typically occurs when a system is unique, proprietary, or the only viable option. The lack of competition limits the government's ability to leverage market forces to drive down prices and potentially explore alternative solutions. The justification for this sole-source award would need to be thoroughly reviewed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, there is less pressure on the contractor to offer the most cost-effective solution, potentially leading to higher overall program costs.

Public Impact

The U.S. Air Force, Navy, and Marine Corps will benefit from enhanced air-to-ground strike capabilities. Foreign Military Sales (FMS) customers and program partners will receive advanced armament, improving interoperability and defense capabilities. The contract supports the development and production of the AARGM-ER missile system, a critical component of modern air power. Workforce implications include skilled labor in aerospace manufacturing and engineering, primarily in Texas where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Long-term contract duration may not account for evolving technological needs or market shifts.
Dependence on a single supplier for critical armament could pose supply chain risks.
Limited public information on the specific performance metrics and testing of the AARGM-ER system.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award supports a strategically important defense capability (AARGM-ER).
Involvement of multiple U.S. services and international partners indicates broad applicability and potential for economies of scale.
Contractor, Lockheed Martin, has extensive experience in defense manufacturing.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long product development cycles, and significant government procurement. This contract falls within the aircraft manufacturing sub-sector, specifically focusing on advanced missile systems. The market for such specialized armament is often dominated by a few large prime contractors due to the complexity and security requirements. Comparable spending benchmarks would typically involve other major missile programs or advanced munitions procurements, which often run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. Lockheed Martin Corporation, the sole awardee, is a large prime contractor. While the prime contractor may utilize small businesses in its supply chain, the direct award does not prioritize small business participation. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Defense, specifically the Department of the Navy, which awarded the contract. Accountability measures are inherent in the firm fixed-price structure, requiring delivery of specified goods. Transparency could be enhanced by making the justification for the sole-source award publicly available and detailing performance metrics. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Anti-Radiation Guided Missile (AARGM)
Joint Standoff Weapon (JSOW)
AGM-158 JASSM
Naval Air Systems Command (NAVAIR) Contracts
Air Force Life Cycle Management Center (AFLCMC) Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Limited public performance data
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.9 million to LOCKHEED MARTIN CORPORATION. THIS CONTRACT ACQUIRES AIRCRAFT ARMAMENT EQUIPMENT FOR AARGM-ER FOR USAF, USN, USMC, FMS CUSTOMERS, AND PROGRAM PARTNERS.

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 $48.9 million.

What is the period of performance?

Start: 2024-06-06. End: 2028-04-30.

What is the specific justification for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services. This could be due to the proprietary nature of the technology, unique capabilities of the contractor, or a lack of adequate competition. For the AARGM-ER program, it is likely that Lockheed Martin possesses the unique intellectual property, manufacturing capabilities, or has been designated as the sole provider of this specific advanced armament system. A full justification would typically be documented and made available through official channels, outlining the rationale and market research conducted to support the sole-source determination.

How does the unit cost of the AARGM-ER compare to similar advanced air-to-ground missiles?

The provided data does not include unit cost information for the AARGM-ER, making a direct comparison impossible. The total contract value of $488.6 million is for a quantity of 1 (indicated by 'no': 1, likely referring to the number of delivery orders or contract actions, not units of missiles). Without knowing the number of missiles procured under this contract, the per-unit cost cannot be calculated. Benchmarking would require access to unit price data for the AARGM-ER and comparing it to publicly available or estimated unit costs of other advanced missiles like the Joint Standoff Weapon (JSOW) or the AGM-158 JASSM, considering their respective capabilities, range, and technological sophistication.

What are the key performance metrics and expected outcomes for the AARGM-ER system under this contract?

The provided data does not detail the specific performance metrics or expected outcomes for the AARGM-ER system. This contract focuses on the acquisition of the equipment. Performance expectations are typically outlined in the contract's statement of work (SOW) or technical specifications, which are not included here. Generally, the AARGM-ER is designed as an advanced anti-radiation missile capable of detecting, identifying, and engaging enemy air defense systems. Key performance indicators would likely relate to its range, accuracy, seeker sensitivity, target discrimination capabilities, and survivability in contested environments. The successful delivery of the armament is the primary contractual outcome.

What is the historical spending trend for the AARGM-ER program or similar systems?

The provided data pertains to a single delivery order with a value of $488.6 million, dated June 6, 2024, with an estimated completion date of April 30, 2028. This single data point does not provide historical spending trends. To assess historical spending, one would need to examine previous contracts awarded for the AARGM-ER program, including research and development, initial production, and any prior delivery orders. Additionally, analyzing spending on predecessor systems like the Advanced Anti-Radiation Guided Missile (AARGM) or comparable advanced missile programs across the DoD would offer context on the program's lifecycle cost and investment trajectory.

What are the potential risks associated with relying on a sole-source provider for critical defense equipment like the AARGM-ER?

Relying on a sole-source provider for critical defense equipment like the AARGM-ER presents several risks. Firstly, there is a lack of competitive pressure, which can lead to higher prices and reduced incentives for innovation or efficiency. Secondly, it creates a single point of failure in the supply chain; any disruption at the contractor's facility (e.g., production issues, labor strikes, financial instability) could halt the supply of essential munitions. Thirdly, the government may have less leverage in negotiating terms or demanding improvements. Finally, it can limit the government's options if alternative or superior technologies emerge from other potential suppliers.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $97,000,000

Exercised Options: $97,000,000

Current Obligation: $48,860,228

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001924G0010

IDV Type: BOA

Timeline