DoD awards $40.2M for aircraft parts, with Lockheed Martin as sole source

Contract Overview

Contract Amount: $40,234,162 ($40.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2027-01-31

Contract Duration: 853 days

Daily Burn Rate: $47.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS RAN AND USN DMAD B KITS

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $40.2 million to LOCKHEED MARTIN CORPORATION for work described as: FMS RAN AND USN DMAD B KITS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Fixed-price contract type suggests cost certainty for the government. 3. Long performance period of 853 days indicates a sustained need. 4. Contract is for aircraft parts, falling under a broad manufacturing NAICS code. 5. No small business set-aside or subcontracting noted, potentially limiting SMB participation.

Value Assessment

Rating: fair

The total award amount is $40.2 million. Without specific unit details or historical pricing for these 'DMAD B KITS', a direct value-for-money assessment is challenging. The contract is firm fixed-price, which shifts cost risk to the contractor. However, the sole-source nature means there was no competitive bidding to establish a market-based price, raising questions about whether the government secured the best possible price.

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 bypasses the competitive process typically used to ensure fair pricing and innovation. The lack of competition means there is no benchmark against other potential suppliers to gauge the reasonableness of the price or the quality of the offering.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The absence of multiple bids means the government could be paying a premium compared to what might have been achieved in an open market.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical aircraft parts. The contract supports the operational readiness of military aircraft. The geographic impact is concentrated in New York, where the contractor is located. Workforce implications are likely within Lockheed Martin's manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-sourcing.
No indication of small business participation or subcontracting goals.

Positive Signals

Firm fixed-price contract provides cost predictability.
Long-term award suggests a stable and ongoing requirement.
Contract awarded to a known entity, Lockheed Martin Corporation.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically related to aircraft parts. The NAICS code 336413 covers 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. Spending in this sector is substantial, driven by military modernization and sustainment programs. Benchmarking requires comparison to similar sole-source awards for specialized aircraft components, which are often less competitive.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for SMBs. This suggests that the primary contractor, Lockheed Martin, will likely fulfill the requirement internally or with large business partners. The absence of specific SMB provisions means there is limited direct benefit to the small business ecosystem from this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and oversight bodies, potentially including the Defense Contract Management Agency (DCMA) given the contract's nature. Accountability measures are inherent in the firm fixed-price structure, requiring the contractor to deliver specified parts within the agreed price. Transparency is limited due to the sole-source award, with justification documents likely held internally by the agency.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Support
Sole-Source Procurement
Lockheed Martin Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.2 million to LOCKHEED MARTIN CORPORATION. FMS RAN AND USN DMAD B KITS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $40.2 million.

What is the period of performance?

Start: 2024-09-30. End: 2027-01-31.

What is the specific nature and function of the 'FMS RAN AND USN DMAD B KITS' being procured?

The provided data does not specify the exact nature or function of the 'FMS RAN AND USN DMAD B KITS'. 'FMS' likely refers to Foreign Military Sales, and 'USN' to the US Navy, suggesting these kits are for naval aircraft components, possibly related to radar (RAN) or other systems. The 'DMAD B' designation is a specific part or kit identifier. Without further details from the contract statement of work or technical specifications, their precise role in aircraft operation remains unclear. This lack of specificity makes it difficult to assess the criticality or uniqueness of these components.

What was the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED', signifying a sole-source award. The specific justification for this sole-sourcing is not detailed in the summary data. Typically, sole-source awards are justified under circumstances such as only one responsible source being available, urgent and compelling needs, or when a specific brand-name item is required that only one manufacturer can provide. Without access to the official justification document (e.g., a Justification and Approval or J&A), it is impossible to determine the precise rationale, which is crucial for understanding potential limitations on competition and price.

How does the $40.2 million award compare to historical spending on similar aircraft parts by the DoD?

Comparing this $40.2 million award to historical spending on similar aircraft parts requires access to broader contract databases and specific part identification. The provided data only gives the total award amount and a general NAICS code (336413). To make a meaningful comparison, one would need to identify previous contracts for the same or functionally equivalent 'DMAD B KITS' or similar specialized components, noting their award amounts, contract types, and competition levels. Without this granular historical data, it's difficult to ascertain if $40.2 million represents an increase, decrease, or is in line with past expenditures for comparable items.

What are the potential risks associated with a sole-source contract for critical aircraft components?

Sole-source contracts for critical aircraft components carry several risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures inherent in a competitive bidding process. Secondly, there's a reduced incentive for the sole contractor to innovate or improve efficiency, as they face no direct market threat. Thirdly, reliance on a single supplier can create supply chain vulnerabilities; if the contractor experiences production issues, delays, or financial instability, it could significantly impact the operational readiness of the aircraft. Finally, the absence of alternative sources limits the government's flexibility in future procurement decisions.

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

Lockheed Martin Corporation is a major defense contractor with an extensive history of supplying aircraft, components, and related services to the Department of Defense. While this specific data point doesn't detail their past performance on 'DMAD B KITS', the company is known for producing complex systems for various military platforms. Their track record generally includes large-scale production, integration, and sustainment efforts. However, like any large contractor, specific contract performance can vary, and a detailed review of their past performance metrics, including on-time delivery, quality control, and cost management for similar parts, would be necessary for a comprehensive assessment.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1801 STATE RT 17 C, OWEGO, NY, 13827

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $73,153,416

Exercised Options: $40,234,162

Current Obligation: $40,234,162

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $16,556,097

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001923G0002

IDV Type: BOA

Timeline