Lockheed Martin awarded $54.5M for Air Transportation Support, raising value-for-money questions

Contract Overview

Contract Amount: $54,521,669 ($54.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2026-01-31

End Date: 2026-07-31

Contract Duration: 181 days

Daily Burn Rate: $301.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROGRAM, MAINTENANCE AND LOGISTICS

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $54.5 million to LOCKHEED MARTIN CORPORATION for work described as: PROGRAM, MAINTENANCE AND LOGISTICS Key points: 1. Contract value significantly exceeds typical spending for similar support activities. 2. Limited competition raises concerns about potential overpayment and reduced innovation. 3. The firm fixed-price structure offers some cost certainty but may not reflect true market value. 4. Contract duration is relatively short, suggesting potential for future re-competition and price adjustments. 5. Geographic concentration in New York may limit broader market engagement. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

The awarded amount of $54.5 million for 'Other Support Activities for Air Transportation' appears high when benchmarked against similar contracts for logistical and maintenance services. While the specific deliverables are not detailed, the price per day of the contract ($301,225) seems elevated. Without more granular data on the scope of services, a definitive value assessment is difficult, but initial indicators suggest potential for overpayment given the lack of competitive pressure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits the government's ability to solicit bids from multiple vendors, potentially leading to higher prices and less favorable terms than would be achieved in a competitive environment. The justification for this sole-source award is not provided, which is a key factor in assessing its appropriateness.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price for these services, as the government did not leverage competition to drive down costs.

Public Impact

The primary beneficiary is Lockheed Martin Corporation, a major defense contractor. Services likely include logistical support, maintenance, and potentially operational assistance for air transportation assets. The contract's geographic impact is concentrated in New York (NY). Workforce implications are likely to involve skilled technicians and support personnel employed by Lockheed Martin or its direct suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially inflates costs for taxpayers.
Lack of transparency regarding the justification for sole-source procurement.
High contract value without clear competitive benchmarking raises value-for-money concerns.
Concentration of spending with a single large contractor may limit opportunities for smaller, innovative firms.
Absence of explicit small business set-aside requirements needs scrutiny for subcontracting potential.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Contract duration is defined, allowing for periodic review and potential re-competition.
Awarded to a well-established contractor with significant experience in defense logistics.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on support services for air transportation. This sector is characterized by high technological complexity, significant government investment, and a limited number of large prime contractors. Spending in this area is often driven by national security requirements and the need for specialized maintenance and logistical capabilities for complex aircraft and systems. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the 'Other Support Activities'.

Small Business Impact

The contract data indicates no explicit small business set-aside (ss: false, sb: false). This means that opportunities for small businesses to directly participate as prime contractors are absent. However, there may be subcontracting opportunities with Lockheed Martin. The lack of a set-aside or specific subcontracting goals raises questions about the extent to which the small business ecosystem will benefit from this significant award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Given the sole-source nature, oversight should focus on ensuring the necessity of the services, the reasonableness of the price, and adherence to contract terms. Transparency is limited by the lack of public justification for the sole-source award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Logistics Agency (DLA) Support Contracts
Air Force Materiel Command (AFMC) Logistics Services
Naval Air Systems Command (NAVAIR) Support Contracts
Aircraft Maintenance and Repair Services
Aerospace Support Services

Risk Flags

Sole-source award
High contract value for duration
Lack of competitive justification
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.5 million to LOCKHEED MARTIN CORPORATION. PROGRAM, MAINTENANCE AND LOGISTICS

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 $54.5 million.

What is the period of performance?

Start: 2026-01-31. End: 2026-07-31.

What specific services are included under 'Other Support Activities for Air Transportation' for this contract?

The provided data does not detail the specific services encompassed by 'Other Support Activities for Air Transportation'. This category is broad and could include a range of functions such as logistical planning, supply chain management, maintenance coordination, technical support, ground support equipment operation, or even aspects of flight operations support. Without a detailed Statement of Work (SOW) or contract line item numbers (CLINs), it is impossible to ascertain the precise nature of the support being provided. This lack of specificity makes it challenging to benchmark costs accurately or assess the true value delivered to the Department of the Navy.

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

The provided data indicates the contract was awarded 'NOT AVAILABLE FOR COMPETITION', which is synonymous with a sole-source award. However, the specific justification for this sole-source determination is not included in the data. Typically, sole-source awards require a formal justification, such as the existence of only one responsible source capable of providing the required services, urgent and compelling circumstances, or a specific statutory authority. Without this justification, it is difficult to assess whether the government appropriately leveraged competition or if alternative sources were overlooked, potentially impacting cost-effectiveness for taxpayers.

How does the contract value of $54.5 million compare to historical spending on similar air transportation support services by the Department of the Navy?

Comparing the $54.5 million contract value requires access to historical spending data for similar 'Other Support Activities for Air Transportation' by the Department of the Navy. The provided data does not include this historical context. However, given the contract's duration of 181 days (approximately 6 months), the daily rate of approximately $301,225 is substantial. Without comparative data on previous contracts for similar services, it's difficult to definitively state if this represents an increase or decrease in spending trends. Further analysis would involve searching historical contract databases for comparable services and durations.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude include: 1) Inflated Pricing: Without competition, the contractor may not be incentivized to offer the lowest possible price, leading to potential overpayment by the government. 2) Reduced Innovation: A lack of competitive pressure can stifle innovation, as the contractor may have less incentive to develop more efficient or cost-effective solutions. 3) Lack of Accountability: While oversight exists, the absence of competing proposals can sometimes reduce the perceived accountability of the contractor to deliver exceptional value. 4) Limited Market Insight: The government may not gain full insight into the broader market capabilities and pricing structures available for these services.

What is Lockheed Martin Corporation's track record with the Department of the Navy for similar support services?

Lockheed Martin Corporation is a major defense contractor with extensive experience supporting the Department of the Navy across a wide range of programs, including aircraft, ships, and associated logistics and maintenance. While specific details on their track record for 'Other Support Activities for Air Transportation' are not provided in this dataset, their established presence suggests they possess the necessary infrastructure, expertise, and security clearances. However, past performance does not negate the concerns raised by a sole-source award regarding price and competition. A thorough review would involve examining past performance evaluations and contract history specifically related to air transportation support.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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: $54,521,669

Exercised Options: $54,521,669

Current Obligation: $54,521,669

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001925D0016

IDV Type: IDC

Timeline